URANIUM ENERGY CORP.(Exact name of registrant as specified in its charter)

Nevada

98-0399476

(State or other jurisdiction of incorporation of
organization)

(I.R.S. Employer Identification No.)

1111 West Hastings Street, Suite 320, Vancouver,
B.C.

V6E 2J3

(Address of principal executive offices)

(Zip Code)

(604) 682-9775 (Registrants telephone number,
including area code)

N/A(Former name, former address and
former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No
[ ]

Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files).
Yes [X] No [ ]

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer or a smaller
reporting company. See the definitions of large accelerated filer,
accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act.

The accompanying notes are an integral part of these condensed
consolidated financial statements

8

URANIUM ENERGY CORP.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS
EQUITY

(Unaudited)

Accumulated

Other

Common Stock

Additional Paid-

Accumulated

Comprehensive

Stockholders'

Shares

Amount

in Capital

Deficit

Loss

Equity

Balance, July 31, 2014

90,966,558

$

90,972

$

208,008,312

$

(168,662,146)

$

(13,539)

$

39,423,599

Common stock

Issued for equity financing, net of issuance costs

280,045

280

175,143

-

-

175,423

Issued for
exercise of stock options

80,948

81

20,468

-

-

20,549

Stock-based compensation

Common stock
issued for consulting services

564,069

562

876,863

-

-

877,425

Options issued for consulting services

-

-

374,435

-

-

374,435

Options issued for
management fees

-

-

1,161,279

-

-

1,161,279

Options issued for employee benefits

-

-

897,527

-

-

897,527

Net loss for the period

-

-

-

(12,601,767)

-

(12,601,767)

Other comprehensive loss

-

-

-

-

(1,672)

(1,672)

Balance, January 31, 2015

91,891,620

$

91,895

$

211,514,027

$

(181,263,913)

$

(15,211)

$

30,326,798

The accompanying notes are an integral part of these condensed
consolidated financial statements

9

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

January 31, 2015

(Unaudited)

NOTE 1:

NATURE OF OPERATIONS AND GOING CONCERN

Uranium Energy Corp. was incorporated in the State of Nevada on
May 16, 2003. Uranium Energy Corp. and its subsidiary companies and a controlled
partnership (collectively, the Company) are engaged in uranium mining and
related activities, including exploration, pre-extraction, extraction and
processing of uranium concentrates, on projects located in the United States and
Paraguay.

Although planned principal operations have commenced from which
significant revenues from sales of uranium concentrates were realized for the
fiscal years ended July 31, 2013 (Fiscal 2013) and 2012 (Fiscal 2012), the
Company has yet to achieve profitability and has had a history of operating
losses and significant negative cash flow since inception. No revenue from
uranium sales was realized for the six months ended January 31, 2015 and the
fiscal year ended July 31, 2014 (Fiscal 2014). Historically, the Company has
been reliant primarily on equity financings from the sale of its common stock
and debt financing in order to fund its operations, and this reliance is
expected to continue for the foreseeable future. During Fiscal 2013 and 2012,
the Company also relied on cash flows generated from its mining activities.

At January 31, 2015, the Company had working capital of $5.7
million including cash and cash equivalents of $4.4 million. The Companys
continuation as a going concern is dependent upon its ability to obtain adequate
additional financing which the Company has successfully secured since its
inception, including those from asset divestitures. However, there is no
assurance that the Company will be successful in securing any form of additional
financing including further asset divestitures and accordingly, there is
substantial doubt as to whether the Companys existing cash resources and
working capital are sufficient to enable the Company to continue its operations
for the next twelve months. The continued operations of the Company, including
the recoverability of the carrying values of its assets, are dependent
ultimately on the Companys ability to achieve and maintain profitability and
positive cash flow from its operations.

These consolidated financial statements have been prepared on a
going concern basis and do not include any adjustments to the amounts and
classification of assets and liabilities that may be necessary in the event the
Company can no longer continue as a going concern.

NOTE 2:

BASIS OF PRESENTATION

The accompanying unaudited interim condensed consolidated
financial statements are presented in U.S. dollars and have been prepared in
accordance with U.S. generally accepted accounting principles (U.S. GAAP) for
interim financial information. Accordingly, they do not include all of the
information and footnotes required under U.S. GAAP for complete financial
statements. These unaudited interim condensed consolidated financial statements
should be read in conjunction with the audited consolidated financial statements
included in the Companys Annual Report on Form 10-K for the fiscal year ended
July 31, 2014. In the opinion of management, all adjustments of a normal
recurring nature and considered necessary for a fair presentation have been
made. Operating results for the six months ended January 31, 2015 are not
necessarily indicative of the results that may be expected for the fiscal year
ending July 31, 2015.

Exploration Stage

The Company has established the existence of mineralized
materials for certain uranium projects, including the Palangana Mine. The
Company has not established proven or probable reserves, as defined by the
United States Securities and Exchange Commission (the SEC) under Industry
Guide 7, through the completion of a final or bankable feasibility study for
any of its uranium projects, including the Palangana Mine. Furthermore, the
Company has no plans to establish proven or probable reserves for any of its
uranium projects for which the Company plans on utilizing in-situ recovery
(ISR) mining, such as the Palangana Mine. As a result, and despite the fact
that the Company commenced extraction of mineralized materials at the Palangana
Mine in November 2010, the Company remains in the Exploration Stage as defined
under Industry Guide 7, and will continue to remain in the Exploration Stage
until such time proven or probable reserves have been established.

10

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

January 31, 2015

(Unaudited)

Since the Company commenced extraction of mineralized materials
at the Palangana Mine without having established proven or probable reserves,
any mineralized materials established or extracted from the Palangana Mine
should not in any way be associated with having established or produced from
proven or probable reserves.

In accordance with U.S. GAAP, expenditures relating to the
acquisition of mineral rights are initially capitalized as incurred while
exploration and pre-extraction expenditures are expensed as incurred until such
time the Company exits the Exploration Stage by establishing proven or probable
reserves. Expenditures relating to exploration activities such as drill programs
to establish mineralized materials are expensed as incurred. Expenditures
relating to pre-extraction activities such as the construction of mine
wellfields, ion exchange facilities and disposal wells are expensed as incurred
until such time proven or probable reserves are established for that project,
after which expenditures relating to mine development activities for that
particular project are capitalized as incurred.

Companies in the Production Stage as defined under Industry
Guide 7, having established proven and probable reserves and exited the
Exploration Stage, typically capitalize expenditures relating to ongoing
development activities, with corresponding depletion calculated over proven and
probable reserves using the units-of-production method and allocated to future
reporting periods to inventory and, as that inventory is sold, to cost of goods
sold. The Company is in the Exploration Stage which has resulted in the Company
reporting larger losses than if it had been in the Production Stage due to the
expensing, instead of capitalization, of expenditures relating to ongoing mill
and mine development activities. Additionally, there would be no corresponding
amortization allocated to future reporting periods of the Company since those
costs would have been expensed previously, resulting in both lower inventory
costs and cost of goods sold and results of operations with higher gross profits
and lower losses than if the Company had been in the Production Stage. Any
capitalized costs, such as expenditures relating to the acquisition of mineral
rights, are depleted over the estimated extraction life using the straight-line
method. As a result, the Companys consolidated financial statements may not be
directly comparable to the financial statements of companies in the Production
Stage.

Recently Issued Accounting Pronouncement

In August 2014, the Financial Accounting Standards Board issued
Accounting Standards Update No. 2014-15, Disclosure of Uncertainties about an
Entity's Ability to Continue as a Going Concern (ASU 2014-15), which provides
guidance on determining when and how to disclose going-concern uncertainties in
the financial statements. ASU 2014-15 requires management to perform interim and
annual assessments of an entity's ability to continue as a going concern within
one year of the date the financial statements are issued. An entity must provide
certain disclosures if conditions or events raise substantial doubt about the
entity's ability to continue as a going concern. ASU 2014-15 applies to all
entities and is effective for annual periods ending after December 15, 2016, and
interim periods thereafter, with early adoption permitted.

NOTE 3:

INVENTORIES

In November 2010, the Company commenced uranium extraction at
its Palangana Mine and processing of uranium concentrates at its Hobson
Processing Facility. The Companys inventories consisted of the following:

January 31, 2015

July 31, 2014

Supplies

$

24,652

$

26,631

Work-in-progress

55,487

63,257

Finished goods - uranium concentrates

2,021,527

1,806,587

$

2,101,666

$

1,896,475

At January 31, 2015, the total non-cash component of inventory
was $411,955 (July 31, 2014: $368,799). For the six months ended January 31,
2015, no inventory write-down to net realizable value was recorded (six months
ended January 31, 2014: $392,149).

11

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

January 31, 2015

(Unaudited)

NOTE 4:

MINERAL RIGHTS AND PROPERTIES

Mineral Rights

At January 31, 2015, the Company had mineral rights in the
States of Arizona, Colorado, New Mexico, Texas and Wyoming and the Republic of
Paraguay. These mineral rights were acquired through staking and purchase, lease
or option agreements and are subject to varying royalty interests, some of which
are indexed to the sale price of uranium. At January 31, 2015, annual
maintenance payments of approximately $1,060,000 are required to maintain these
mineral rights.

Mineral rights and property acquisition costs consisted of the
following:

January 31, 2015

July 31, 2014

Mineral Rights and Properties,
Unproven

Palangana Mine

$

6,587,135

$

6,664,260

Goliad Project

8,689,127

8,689,127

Burke Hollow
Project

1,495,750

1,495,750

Longhorn Project

116,870

116,870

Salvo Project

364,710

364,710

Nichols Project

154,774

154,774

Anderson Project

9,154,268

9,154,268

Workman Creek Project

1,422,008

1,372,008

Los Cuatros
Project

257,250

257,250

Slick Rock Project

661,271

661,271

Yuty Project

11,947,144

11,947,144

Coronel Oviedo Project

1,133,412

1,133,412

Other Property Acquisitions

285,739

262,115

42,269,458

42,272,959

Accumulated Depletion

(3,784,481)

(3,454,533)

38,484,977

38,818,426

Databases

2,405,038

2,405,038

Accumulated Amortization

(2,052,021)

(1,928,901)

353,017

476,137

Land Use Agreements

390,155

390,155

Accumulated Amortization

(215,525)

(196,019)

174,630

194,136

$

39,012,624

$

39,488,699

During the three months ended January 31, 2015, the asset
retirement obligations (ARO) of the Palangana Mine were revised due to changes
in the estimated timing of restoration and reclamation of the Palangana Mine. As
a result, ARO liabilities and the corresponding mineral rights and properties
associated with the Palangana Mine were reduced by $77,125.

The Company has not established proven or probable reserves, as
defined by the SEC under Industry Guide 7, through the completion of a final
or bankable feasibility study for any of its mineral projects. The Company has
established the existence of mineralized materials for certain uranium projects,
including the Palangana Mine. Since the Company commenced uranium extraction at
the Palangana Mine without having established proven or probable reserves, there
may be greater inherent uncertainty as to whether or not any mineralized
material can be economically extracted as originally planned and anticipated.

12

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

January 31, 2015

(Unaudited)

No revenues were generated from the sale of uranium
concentrates during the six months ended January 31, 2015 or Fiscal 2014.
Historically, the Palangana Mine has been the Companys sole source for uranium
concentrates sold to generate its revenues during Fiscal 2013 and 2012, with no
revenues generated prior to Fiscal 2012. The economic viability of the Companys
mining activities, including the expected duration and profitability of the
Palangana Mine and of any future satellite ISR mines, such as the Goliad and
Burke Hollow Projects, located within the South Texas Uranium Belt, has many
risks and uncertainties. These include, but are not limited to: (i) a
significant, prolonged decrease in the market price of uranium; (ii) difficulty
in marketing and/or selling uranium concentrates; (iii) significantly higher
than expected capital costs to construct the mine and/or processing plant; (iv)
significantly higher than expected extraction costs; (v) significantly lower
than expected uranium extraction; (vi) significant delays, reductions or
stoppages of uranium extraction activities; and (vii) the introduction of
significantly more stringent regulatory laws and regulations. The Companys
mining activities may change as a result of any one or more of these risks and
uncertainties and there is no assurance that any ore body that we extract
mineralized materials from will result in profitable mining activities.

Mineral property expenditures incurred by major projects were
as follows:

Three Months
Ended January 31,

Six Months
Ended January 31,

2015

2014

2015

2014

Mineral Property Expenditures

Palangana Mine

$

688,196

$

635,877

$

1,120,856

$

1,307,459

Goliad Project

20,036

1,027,060

54,293

1,172,031

Burke Hollow Project

159,981

423,771

1,140,548

598,069

Longhorn Project

19,477

20,456

30,723

28,700

Salvo Project

2,039

227

22,839

1,016

Anderson Project

29,250

43,524

123,422

127,685

Workman Creek Project

-

1,240

31,300

30,211

Slick Rock Project

-

1,986

49,784

51,011

Yuty Project

40,872

62,924

259,761

80,749

Coronel Oviedo Project

151,178

60,045

295,762

144,196

Other Mineral Property Expenditures

143,239

306,910

385,111

631,036

$

1,254,268

$

2,584,020

$

3,514,399

$

4,172,163

NOTE 5:

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following:

January 31,
2015

July 31, 2014

Accumulated

Net Book

Accumulated

Net Book

Cost

Depreciation

Value

Cost

Depreciation

Value

Hobson Processing Facility

$

7,107,717

$

(684,550)

$

6,423,167

$

7,107,717

$

(595,169)

$

6,512,548

Mining Equipment

2,441,416

(1,885,595)

555,821

2,587,206

(1,678,958)

908,248

Logging Equipment and
Vehicles

1,962,895

(1,647,849)

315,046

1,855,451

(1,559,850)

295,601

Computer Equipment

619,625

(563,988)

55,637

645,622

(551,633)

93,989

Furniture and Fixtures

182,801

(175,752)

7,049

183,810

(164,003)

19,807

Land

175,144

-

175,144

175,144

-

175,144

$

12,489,598

$

(4,957,734)

$

7,531,864

$

12,554,950

$

(4,549,613)

$

8,005,337

13

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

January 31, 2015

(Unaudited)

NOTE 6:

RECLAMATION DEPOSITS

Reclamation deposits include interest and non-interest bearing
deposits held with external financial institutions relating to exploration,
pre-extraction, extraction and processing activities in the States of Arizona,
Texas and Wyoming.

Reclamation deposits consisted of the following:

January 31, 2015

July 31, 2014

Palangana Mine

$

1,102,981

$

3,689,666

Hobson Processing Facility

587,228

1,957,476

Arizona

15,000

15,000

Wyoming

816

815

1,706,025

5,662,957

Interest

-

15,672

$

1,706,025

$

5,678,629

In November 2014, the Company secured $5.6 million of surety
bonds, subject to a 2% annual premium on the face value, as an alternate source
of financial assurance for its future remediation and decommissioning activities
at the Palangana Mine and Hobson Processing Facility. These surety bonds
replaced an equivalent amount of reclamation deposits funded entirely through
cash payments by the Company, allowing for the release of $3.9 million in cash
to the Company. The remaining $1.7 million, representing 30% of the face value
of the surety bonds and comprised of $1.1 million relating to the Palangana Mine
and $0.6 million relating to the Hobson Processing Facility, is held as
restricted cash for collateral purposes as required by the surety.

NOTE 7:

DUE TO RELATED PARTIES AND RELATED PARTY
TRANSACTIONS

During the three and six months ended January 31, 2015, the
Company incurred $33,524 and $72,658 (three and six months ended January 31,
2014: $36,237 and $73,640), respectively, in general and administrative costs
paid to a company controlled by a direct family member of a director and
officer. In addition, during the six months ended January 31, 2015, the Company
issued 15,000 restricted shares to this company for consulting services with a
fair value of $18,150 included in general and administrative costs.

During the three and six months ended January 31, 2014, the
Company incurred $9,000 and $18,000, respectively, in consulting fees paid to a
company controlled by a former director of the Company.

At January 31, 2015, amounts owed to related parties totaled
$4,917 (July 31, 2014: $11,234). These amounts are unsecured, non-interest
bearing and due on demand.

NOTE 8:

LONG-TERM DEBT

Long-term debt consisted of the following:

January 31, 2015

July 31, 2014

Principal amount

$

20,000,000

$

20,000,000

Unamortized discount

(678,361)

(1,294,863)

Long-term debt, net of unamortized discount

$

19,321,639

$

18,705,137

For the three and six months ended January 31, 2015, the
amortization of debt discount totaled $314,044 and $616,502 (three and six
months ended January 31, 2014: $465,648 and $896,655), respectively, which were
recorded as interest expense and included in the consolidated statements of
operations.

14

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

January 31, 2015

(Unaudited)

The aggregate yearly maturities of long-term debt based on
principal amounts outstanding at January 31, 2015 are as follows:

Fiscal 2015

$

-

Fiscal 2016

1,666,667

Fiscal 2017

18,333,333

Total

$

20,000,000

NOTE 9:

ASSET RETIREMENT OBLIGATIONS

The Company's asset retirement obligations (ARO) relate to
site restoration for the Palangana Mine and Hobson Processing Facility.

Balance, July 31, 2014

$

3,967,589

Revision in estimate of asset
retirement obligations

(77,125)

Accretion

160,737

Balance, January 31, 2015

4,051,201

Less: current portion of asset retirement obligations

(340,827)

Long-term asset retirement obligations

$

3,710,374

January 31, 2015

July 31, 2014

Undiscounted amount of estimated cash flows

$

6,393,712

$

6,382,549

Payable in years

2.5 to 12

2.5 to 12

Inflation rate

1.56% to 2.43%

1.56% to 2.43%

Discount rate

5.00% to 10.50%

5.00% to 10.50%

The undiscounted amounts of estimated cash flows for the next
five fiscal years and beyond are as follows:

Fiscal 2015

$

170,414

Fiscal 2016

340,827

Fiscal 2017

1,110,575

Fiscal 2018

635,932

Fiscal 2019

-

Remaining balance

4,135,964

$

6,393,712

NOTE 10:

CAPITAL STOCK

Capital Stock

At January 31, 2015, the Companys capital stock was
750,000,000 authorized shares of common stock with a par value of $0.001 per
share.

The Company previously filed a Form S-3 Shelf Registration
Statement effective September 2, 2011 (the 2011 Shelf) providing for the
public offer and sale of certain securities of the Company from time to time, at
its discretion, up to an aggregate amount of $50 million of which a total of
$34.4 million was utilized through public offers and sales of shares and units.
The Company filed a further registration statement effective December 31, 2013
providing for the public offer and sale of certain securities of the Company
representing an additional 20%, or $3.1 million, of the then remaining $15.6
million available under the 2011 Shelf, which increased the remaining amount
available under the 2011 Shelf to $18.7 million.

15

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

January 31, 2015

(Unaudited)

The Company filed a prospectus supplement to the 2011 Shelf,
providing for the public offer and sale of the Companys shares having an
aggregate offering price of up to $18.7 million through one or more
at-the-market offerings (the ATM Offering) pursuant to a Controlled Equity
OfferingSM Sales Agreement effective December 31, 2013 between Cantor
Fitzgerald & Co., as sales agent, and the Company. During the six months
ended January 31, 2015, the Company completed a public offer and sale of 280,045
shares of the Company at a price of $1.70 per share for gross proceeds of
$474,788 under the ATM Offering, with transaction costs of $289,870 relating to
the 2011 Shelf and ATM Offering previously included in prepaid expenses and
deposits charged to additional paid-in capital as corresponding share issuance
costs.

The 2011 Shelf expired on September 2, 2014. As a result, no
further public offer and sale of the Companys shares may be completed through
the ATM Offering under the 2011 Shelf.

During Fiscal 2014, the Company filed a second Form S-3 Shelf
Registration Statement effective January 10, 2014 providing for the public offer
and sale of certain securities of the Company from time to time, at its
discretion, up to an aggregate offering of $100 million.

A summary of share purchase warrants outstanding and
exercisable at January 31, 2015 is presented below:

Weighted

Weighted Average

Average

Number of
Warrants

Expiry Date

Remaining
Contractual

Exercise Price

Outstanding

Life (Years)

$

1.00

500,000

March 1, 2016

1.08

1.95

50,000

June 3, 2016

1.34

2.50

2,600,000

July 30, 2018

3.49

2.60

1,859,524

October 23, 2016

1.73

$

2.38

5,009,524

2.58

Stock Options

At January 31, 2015, the Company had one stock option plan, the
2014 Stock Incentive Plan (the 2014 Plan). The 2014 Plan provides for
7,500,000 shares of the Company that may be issued pursuant to awards that may
be granted and an additional 7,958,941 shares of the Company that may be issued
pursuant to stock options previously granted under the Companys prior 2013
Stock Incentive Plan. The 2014 Plan supersedes and replaces the Companys prior
2013 Stock Incentive Plan, which superseded and replaced the Companys prior
2009 and 2006 Stock Option Plans, such that no further shares are issuable under
these prior plans.

16

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

January 31, 2015

(Unaudited)

In September 2014, the Company granted stock options under the
2014 Plan to the Companys directors, officers, employees and consultants to
purchase a total of 7,540,000 shares of the Company exercisable at a price of
$1.32 per share over a five-year term. These stock options are subject to an
18-month vesting provision whereby at the end of each of the first three, six,
12 and 18 months after the grant date, 25% of the total stock option grant
becomes exercisable.

These stock options have a five-year contractual term, which is
significantly different from the 10-year contractual term generally applicable
to stock options previously granted by the Company. Since no relevant historical
information was available to provide a reasonable basis in estimating the
expected life, the Company adopted the simplified method, being the mid-point of
the average vesting date and the end of the contractual term, to estimate the
expected life for these stock options.

The grant date fair value of these stock options was $0.50
which was valued using the Black-Scholes option pricing model with the following
assumptions:

Expected Risk Free Interest Rate

0.94%

Expected Volatility

56.28%

Expected Life in Years

2.90

Expected Dividend Yield

0.00%

In December 2014, the Company cancelled certain stock options
previously granted to the Companys directors, officers, employees and
consultants to purchase a total of 4,294,000 shares of the Company exercisable
at prices ranging from $2.25 to $5.65 per share with original contractual terms
of ten years.

A continuity schedule of outstanding stock options for the
underlying common shares for the six months ended January 31, 2015 is presented
below:

Weighted Average

Number of Stock

Weighted Average

Remaining
Contractual

Options

Exercise Price

Term (Years)

Balance, July 31, 2014

7,987,214

$

2.10

4.97

Issued

7,540,000

1.32

4.84

Exercised

(28,937)

0.33

1.28

Forfeited

(58,750)

2.82

7.26

Balance, October 31, 2014

15,439,527

1.72

4.78

Issued

50,000

1.20

4.97

Exercised

(58,332)

0.38

1.45

Expired

(487)

5.13

-

Forfeited

(67,500)

2.25

5.28

Cancelled

(4,294,000)

2.59

5.59

Balance, January 31, 2015

11,069,208

$

1.39

4.16

At January 31, 2015, the aggregate intrinsic value under the
provisions of ASC 718 of all outstanding stock options was estimated at
$1,669,939 (vested: $1,666,439 and unvested: $3,500).

At January 31, 2015, unrecognized stock-based compensation
expense related to the unvested portion of stock options granted under the
Companys 2014 Plan totaled $1,412,823 to be recognized over the next 1.09
years.

17

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

January 31, 2015

(Unaudited)

A summary of stock options outstanding and exercisable at
January 31, 2015 is presented below:

Options
Outstanding

Options
Exercisable

Weighted

Weighted

Range of Exercise Prices

Outstanding at

Average
Exercise

Exercisable at

Average
Exercise

January 31, 2015

Price

January 31, 2015

Price

$0.33 to $0.70

1,913,922

$

0.41

1,913,922

$

0.41

$0.71 to $2.45

8,187,500

1.38

2,501,250

1.53

$2.46 to $5.90

967,786

3.33

967,786

3.33

11,069,208

$

1.39

5,382,958

$

1.46

Stock-Based Compensation

A summary of stock-based compensation expense is presented
below:

Three Months
Ended January 31,

Six Months
Ended January 31,

2015

2014

2015

2014

Stock-Based Consulting Fees

Common
stock issued for consulting services

$

547,094

$

266,366

$

877,425

$

556,918

Options issued to consultants

274,056

60,114

374,435

73,718

821,150

326,480

1,251,860

630,636

Stock-Based Management Fees

Options issued to management

589,003

55,000

1,161,279

55,000

589,003

55,000

1,161,279

55,000

Stock-Based Wages and
Benefits

Options issued to employees

446,217

34,404

897,527

68,573

446,217

34,404

897,527

68,573

Stock-based compensation charged to inventory

-

(1,650)

-

(2,643)

$

1,856,370

$

414,234

$

3,310,666

$

751,566

NOTE 11:

LOSS PER SHARE

The following table reconciles weighted average number of shares used in the
computation of basic and diluted loss per share:

Three Months
Ended January 31,

Six Months
Ended Janury 31,

2015

2014

2015

2014

Numerator

Net Loss for the Period

$

(5,875,540)

$

(7,178,894)

$

(12,601,767)

$

(13,058,828)

Denominator

Basic Weighted Average Number of Shares

91,746,410

89,701,157

91,513,626

88,058,149

Dilutive Stock Options and Warrants

-

-

-

-

Diluted Weighted Average Number of Shares

91,746,410

89,701,157

91,513,626

88,058,149

Net Loss per Share, Basic and Diluted

$

(0.06)

$

(0.08)

$

(0.14)

$

(0.15)

For the three months and six months ended January 31, 2015 and
2014, all outstanding stock options and share purchase warrants were excluded
from the computation of diluted loss per share since the Company reported net
losses for those periods and their effects would be anti-dilutive.

18

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

January 31, 2015

(Unaudited)

NOTE 12:

SEGMENTED INFORMATION

The Company currently operates in a single reportable segment
and is focused on uranium mining and related activities, including exploration,
pre-extraction, extraction and processing of uranium concentrates.

At January 31, 2015, long-term assets located in the U.S.
totaled $35,264,472 or 73% of the Companys total long-term assets of
$48,376,229.

The table below provides a breakdown of the Companys long-term
assets by geographic segments:

January 31, 2015

Balance Sheet Items

United States

Canada

Paraguay

Total

Texas

Arizona

Other States

Deferred Financing Costs

$

125,716

$

-

$

-

$

-

$

-

$

125,716

Mineral Rights and Properties

14,183,979

10,841,861

906,229

-

13,080,555

39,012,624

Property, Plant and Equipment

7,500,662

-

-

12,169

19,033

7,531,864

Reclamation
Deposits

1,690,209

15,000

816

-

-

1,706,025

Total Long-term Assets

$

23,500,566

$

10,856,861

$

907,045

$

12,169

$

13,099,588

$

48,376,229

July 31, 2014

Balance Sheet Items

United States

Canada

Paraguay

Total

Texas

Arizona

Other States

Deferred Financing Costs

$

167,621

$

-

$

-

$

-

$

-

$

167,621

Mineral
Rights and Properties

14,732,677

10,791,861

883,606

-

13,080,555

39,488,699

Property, Plant and Equipment

7,966,833

-

465

12,960

25,079

8,005,337

Reclamation Deposits

5,662,814

15,000

815

-

-

5,678,629

Total Long-term Assets

$

28,529,945

$

10,806,861

$

884,886

$

12,960

$

13,105,634

$

53,340,286

19

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

January 31, 2015

(Unaudited)

The tables below provide a breakdown of the Companys operating
results by geographic segments. All intercompany transactions have been
eliminated.

Three Months
Ended January 31, 2015

Statement of Operations

United States

Canada

Paraguay

Total

Texas

Arizona

Other States

Sales

$

-

$

-

$

-

$

-

$

-

$

-

Costs and Expenses:

Cost of
sales

-

-

-

-

-

-

Inventory write-down

-

-

-

-

-

-

Mineral
property expenditures

1,009,065

30,359

22,794

-

192,050

1,254,268

General and
administrative

2,708,137

40,341

7,061

603,798

7,112

3,366,449

Depreciation,
amortization and accretion

482,655

-

687

3,034

3,108

489,484

Impairment loss on mineral property

-

-

-

-

-

-

4,199,857

70,700

30,542

606,832

202,270

5,110,201

Loss from operations

(4,199,857)

(70,700)

(30,542)

(606,832)

(202,270)

(5,110,201)

Other income and (expenses)

(762,161)

(5,189)

-

(120)

4

(767,466)

Loss before income taxes

$

(4,962,018)

$

(75,889)

$

(30,542)

$

(606,952)

$

(202,266)

$

(5,877,667)

Three Months
Ended January 31, 2014

Statement of Operations

United States

Canada

Paraguay

Total

Texas

Arizona

Other States

Sales

$

-

$

-

$

-

$

-

$

-

$

-

Costs and Expenses:

Cost of sales

-

-

-

-

-

-

Inventory write-down

-

-

-

-

-

-

Mineral property
expenditures

2,370,002

54,838

36,210

-

122,970

2,584,020

General and administrative

1,847,137

110,229

23,631

1,085,483

16,000

3,082,480

Depreciation,
amortization and accretion

633,823

-

780

10,308

2,970

647,881

Impairment loss on mineral property

-

-

-

-

-

-

4,850,962

165,067

60,621

1,095,791

141,940

6,314,381

Loss from operations

(4,850,962)

(165,067)

(60,621)

(1,095,791)

(141,940)

(6,314,381)

Other income and (expenses)

(859,374)

(5,189)

-

33

17

(864,513)

Loss before income taxes

$

(5,710,336)

$

(170,256)

$

(60,621)

$

(1,095,758)

$

(141,923)

$

(7,178,894)

20

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

January 31, 2015

(Unaudited)

Six Months Ended January 31,
2015

Statement of Operations

United States

Canada

Paraguay

Total

Texas

Arizona

Other States

Sales

$

-

$

-

$

-

$

-

$

-

$

-

Costs and Expenses:

Cost of
sales

-

-

-

-

-

-

Inventory write-down

-

-

-

-

-

-

Mineral
property expenditures

2,644,891

157,467

156,519

-

555,522

3,514,399

General and
administrative

5,056,097

96,877

14,025

1,362,183

14,855

6,544,037

Depreciation,
amortization and accretion

1,052,548

-

1,467

6,497

6,214

1,066,726

Impairment loss on mineral property

-

-

-

-

-

-

8,753,536

254,344

172,011

1,368,680

576,591

11,125,162

Loss from operations

(8,753,536)

(254,344)

(172,011)

(1,368,680)

(576,591)

(11,125,162)

Other income and (expenses)

(1,490,052)

(10,378)

-

(120)

315

(1,500,235)

Loss before income taxes

$

(10,243,588)

$

(264,722)

$

(172,011)

$

(1,368,800)

$

(576,276)

$

(12,625,397)

Six Months Ended
January 31, 2014

Statement of Operations

United States

Canada

Paraguay

Total

Texas

Arizona

Other States

Sales

$

-

$

-

$

-

$

-

$

-

$

-

Costs and Expenses:

Cost of sales

-

-

-

-

-

-

Inventory write-down

392,149

-

-

-

-

392,149

Mineral property
expenditures

3,615,463

181,531

150,224

-

224,945

4,172,163

General and administrative

3,171,670

144,646

64,963

1,990,105

16,885

5,388,269

Depreciation,
amortization and accretion

1,161,119

758

5,910

15,231

5,942

1,188,960

Impairment loss on mineral property

-

-

28,891

-

-

28,891

8,340,401

326,935

249,988

2,005,336

247,772

11,170,432

Loss from operations

(8,340,401)

(326,935)

(249,988)

(2,005,336)

(247,772)

(11,170,432)

Other income and (expenses)

(1,875,861)

(10,378)

-

(2,190)

33

(1,888,396)

Loss before income taxes

$

(10,216,262)

$

(337,313)

$

(249,988)

$

(2,007,526)

$

(247,739)

$

(13,058,828)

NOTE 13:

SUPPLEMENTAL CASH FLOW INFORMATION

During the six months ended January 31, 2015, the Company
issued 564,069 restricted shares with a fair value of $877,425 for consulting
services.

NOTE 14:

COMMITMENTS AND CONTINGENCIES

The Company is renting or leasing various office or storage
space located in the United States, Canada and Paraguay with total monthly
payments of $19,472. Office lease agreements expire between April 2015 to
January 2016 for the United States and Canada.

The aggregate minimum payments over the next five fiscal years
are as follows:

Fiscal 2015

$

113,396

Fiscal 2016

36,428

$

149,824

The Company is committed to pay its key executives a total of
$740,000 per year for management services.

On or about March 9, 2011, the Texas Commission on
Environmental Quality (the TCEQ) granted the Companys applications for a
Class III Injection Well Permit, Production Area Authorization and Aquifer
Exemption for its Goliad Project. On or about December 4, 2012, the U.S.
Environmental Protection Agency (the EPA) concurred with the TCEQ issuance of
the Aquifer Exemption permit (the AE). With the receipt of this concurrence,
the finalauthorization required for uranium extraction, the Goliad Project
achieved fully-permitted status. On or about May 24, 2011, a group of
petitioners, inclusive of Goliad County, appealed the TCEQ action to the
250th District Court in Travis County,
Texas. A motion filed by the Company to intervene in this matter was granted.
The petitioners appeal lay dormant until on or about June 14, 2013, when the
petitioners filed their initial brief in support of their position. On or about
January 18, 2013, a different group of petitioners, exclusive of Goliad County,
filed a petition for review with the Court of Appeals for the Fifth Circuit in
the United States (the Fifth Circuit) to appeal the EPAs decision. On or
about March 5, 2013, a motion filed by the Company to intervene in this matter
was granted. The parties attempted to resolve both appeals and, to facilitate
discussions and to avoid further legal costs, the parties jointly agreed,
through mediation which was initially conducted through the Fifth Circuit on or
about August 8, 2013, to abate the proceedings in the State District Court. On
or about August 21, 2013, the State District Court agreed to abate the
proceedings. The EPA subsequently filed a motion to remand without vacatur with
the Fifth Circuit wherein the EPA's stated purpose was to elicit additional
public input and further explain its rationale for the approval. In requesting
the remand without vacatur, which would allow the AE to remain in place during
the review period, the EPA denied the existence of legal error and stated that
it was unaware of any additional information that would merit reversal of the
AE. The Company and the TCEQ filed a request to the Fifth Circuit for the motion
to remand without vacatur, if granted, to be limited to a 60-day review period.
On December 9, 2013, by way of a procedural order from a three-judge panel of
the Fifth Circuit, the Court granted the remand without vacatur and initially
limited the review period to 60 days. In March of 2014, at the EPAs request,
the Fifth Circuit extended the EPAs time period for review and additionally,
during that same period, the Company conducted a joint groundwater survey of the
site, the result of which reaffirmed the Companys previously filed groundwater
direction studies. On or about June 17, 2014, the EPA reaffirmed its earlier
decision to uphold the granting of the Companys existing AE, with the exception
of a northwestern portion containing less than 10% of the uranium resource which
was withdrawn, but not denied, from the AE area until additional information is
provided in the normal course of mine development. On or about September 9,
2014, the petitioners filed a status report with the State District Court which
included a request to remove the stay agreed to in August 2013 and to set a
briefing schedule (the Status Report). In that Status Report, the petitioners
also stated that they had decided not to pursue their appeal at the Fifth
Circuit. The Company continues to believe that the pending appeal is without
merit and is continuing forward as planned towards uranium extraction at its
fully-permitted Goliad Project.

21

URANIUM ENERGY CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

January 31, 2015

(Unaudited)

On or about April 3, 2012, the Company received notification of
a lawsuit filed in the State of Arizona, in the Superior Court for the County of
Yavapai, by certain petitioners (the Plaintiffs) against a group of
defendants, including the Company and former management and board members of
Concentric. The lawsuit asserts certain claims relating to the Plaintiffs
equity investments in Concentric, including allegations that the former
management and board members of Concentric engaged in various wrongful acts
prior to and/or in conjunction with the merger of Concentric. The lawsuit
originally further alleged that the Company was contractually liable for
liquidated damages arising from a pre-merger transaction which the Company
previously acknowledged and recorded as an accrued liability, and which portion
of the lawsuit was settled in full by a cash payment of $149,194 to the
Plaintiffs and subsequently dismissed. The court dismissed several other claims
set forth in the Plaintiffs initial complaint, but granted the Plaintiffs leave
to file an amended complaint. The court denied a subsequent motion to dismiss
the amended complaint, finding that the pleading met the minimal pleading
requirements under the applicable procedural rules. In October 2013, the Company
filed a formal response denying liability for any of the Plaintiffs remaining
claims and is vigorously defending against any and all remaining claims asserted
under this lawsuit. The parties have exchanged preliminary disclosure
statements, and formal discovery is currently in progress. A trial date has been
set for April 2016. The Company continues to believe that this lawsuit is
without merit, and intends to file a dispositive motion prior to the deadline
set by the court.

22

Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations

The following managements discussion and analysis of
financial condition and results of operations of the Company (MD&A)
contains forward-looking statements that involve risks, uncertainties and
assumptions including, among others, statements regarding our capital needs,
business plans and expectations. In evaluating these statements, you should
consider various factors including the risks, uncertainties and assumptions set
forth in the reports and other documents we have filed with or furnished to the
SEC, including, without limitation, this Quarterly Report on Form 10-Q for the
three and six months ended January 31, 2015 and the Companys Annual Report on
Form 10-K for the fiscal year ended July 31, 2014 including the consolidated
financial statements and related notes contained therein. These factors, or any
one of them, may cause our actual results or actions in the future to differ
materially from any forward-looking statement made in this document. Refer to
Item 1A. Risk Factors under Part II - Other Information.

Introduction

This MD&A is focused on material changes in our financial
condition from July 31, 2014, our most recently completed year-end, to January
31, 2015 and our results of operations for the three and six months ended
January 31, 2015 and 2014, and should be read in conjunction with the MD&A
contained in our Form 10-K Annual Report for the fiscal year ended July 31,
2014.

Business

We operate in a single reportable segment and since 2004, as
more fully described in our Form 10-K Annual Report for the fiscal year ended
July 31, 2014, we have been engaged in uranium mining and related activities,
including exploration, pre-extraction, extraction and processing, on uranium
projects located in the United States and Paraguay.

We utilize in-situ recovery (ISR) mining where possible which
we believe, when compared to conventional open pit or underground mining,
requires lower capital and operating expenditures with a shorter lead time to
extraction and a reduced impact on the environment. We have one uranium mine
located in the State of Texas, the Palangana Mine, which utilizes ISR mining and
commenced extraction of uranium concentrates (U3O8), or
yellowcake, in November 2010. We have one uranium processing facility or mill
located in the State of Texas, the Hobson Processing Facility, which processes
material from the Palangana Mine into drums of U3O8, our
only sales product and source of revenue, for shipping to a third-party storage
and sales facility. At January 31, 2015, we had no uranium supply or off-take
agreements in place.

Our fully-licensed and 100%-owned Hobson Processing Facility
forms the basis for our regional operating strategy in the State of Texas,
specifically the South Texas Uranium Belt where we utilize ISR mining. We
utilize a hub-and-spoke strategy whereby the Hobson Processing Facility, which
has a physical capacity to process uranium-loaded resins up to a total of two
million pounds of U3O8 annually and is licensed to process
up to one million pounds of U3O8 annually, acts as the
central processing site (the hub) for our Palangana Mine and future satellite
uranium mining activities, such as our Goliad and Burke Hollow Projects, located
within the South Texas Uranium Belt (the spokes).

We also hold certain mineral rights in various stages in the
States of Arizona, Colorado, New Mexico, Texas and Wyoming and in the Republic
of Paraguay, many of which are located in historically successful mining areas
and have been the subject of past exploration and pre-extraction activities by
other mining companies. We do not expect, however, to utilize ISR mining for all
of our mineral rights in which case we would expect to rely on conventional open
pit and/or underground mining techniques.

Our operating and strategic framework is based on expanding our
uranium extraction activities, which includes advancing certain uranium projects
with established mineralized materials towards uranium extraction, and
establishing additional mineralized materials on our existing uranium projects
or through acquisition of additional uranium projects.

On September 5, 2013, we announced a strategic plan to align
our operations to adapt to the existing uranium market in a challenging
post-Fukushima environment, most notably the uranium spot price being at
historical lows. Since then, uranium extraction at the Palangana Mine has
operated at a reduced pace, including the deferral of any further pre-extraction
expenditures, to maintain operational readiness in anticipation of a recovery in
uranium spot prices. Pre-extraction activities at other PAAs of the Palangana
Mine and at the Goliad Project have continued, as well as further exploration
and permitting activities completed at the Burke Hollow Project.

23

During the six months ended January 31, 2015:

permitting activities continued to advance at other PAAs of the Palangana
Mine;

permitting activities continued and a drill program comprised of 43
exploration holes totaling 22,295 feet was completed at the Burke Hollow
Project located in Texas;

a Preliminary Economic Assessment dated July 6, 2014 prepared in
accordance with National Instrument 43-101, Standards of Disclosure for
Mineral Projects of the Canadian Securities Administrators, (NI 43- 101) was
filed for the Anderson Project located in Arizona;

an updated Technical Report dated October 6, 2014 prepared in accordance
with NI 43-101 was filed for the Burke Hollow Project;

a public offer and sale of 280,045 shares of the Company was completed at
a price of $1.70 per share for gross proceeds of $474,788 under the ATM
Offering;

$5.6 million of surety bonds were secured, subject to a 2% annual premium
on the face value, which replaced an equivalent amount of reclamation deposits
related to future remediation and decommissioning activities at the Palangana
Mine and Hobson Processing Facility, and resulted in the release of $3.9
million as cash and cash equivalents to the Company; and

Scott Melbye was appointed Executive Vice President and Craig Wall was
appointed Vice President of Environmental, Health and Safety.

Mineral Rights and Properties

The following is a summary of significant activities by project
for the six months ended January 31, 2015:

Texas: Palangana Mine

During the six months ended January 31, 2015, we continued with
our strategic plan for reduced operations initiated in Fiscal 2014. Since then,
uranium extraction at the Palangana Mine has operated at a reduced pace,
including the deferral of any further pre-extraction expenditures, to maintain
operational readiness in anticipation of a recovery in uranium spot prices.

The Mine Area permit to include additional PAAs at the
Palangana Mine was approved and issued by the Texas Commission on Environmental
Quality (TCEQ). Both the PAA-4 permit and the Radioactive Material License
amendment to add PAA-4 were approved and issued by the TCEQ. The Aquifer
Exemption amendment to include PAA-4 was approved and issued by the TCEQ and
submitted to the Environmental Protection Agency for final approval and
concurrence.

Texas: Burke Hollow Project

During the six months ended January 31, 2015, 43 exploration
holes totaling 22,295 feet were drilled at the Burke Hollow Project to depths
ranging from a minimum 140 feet to a maximum 1,100 feet, with an average depth
of 518 feet. At January 31, 2015, a total of 526 exploration holes, including 30
monitor wells, totaling 246,400 feet have been drilled to depths ranging from a
minimum 140 feet to a maximum 1,100 feet, with an average depth of 468 feet.

The Mine Area, Aquifer Exemption, Radioactive Material License
and two Waste Disposal Well applications continue to be under technical review
by the TCEQ.

An updated Technical Report dated of October 6, 2014 prepared
in accordance with NI 43-101 was filed for the Burke Hollow Project which
summarized the geology and mineralized materials resulting from the Companys
three drilling campaigns conducted between May 2012 and September 2014.

24

Arizona: Anderson Project

Planning is underway for initiating baseline data acquisition
activities in support of mine permitting at the Anderson Project. A Preliminary
Economic Assessment dated July 6, 2014 prepared in accordance with NI 43-101 was
completed and filed in September 2014.

Results of Operations

For the three and six months ended January 31, 2015, we
recorded a net loss of $5,875,540 ($0.06 per share) and $12,601,767 ($0.14 per
share), respectively. Costs and expenses during the three and six months ended
January 31, 2015 were $5,110,201 and $11,125,162, respectively.

For the three and six months ended January 31, 2014, we
recorded a net loss of $7,178,894 ($0.08 per share) and $13,058,828 ($0.15 per
share), respectively. Costs and expenses during the three and six months ended
January 31, 2014 were $6,314,381 and $11,170,432, respectively.

Uranium Extraction Activities

During the six months ended January 31, 2015, we continued with
our strategic plan for reduced operations initiated in Fiscal 2014. Uranium
extraction at PAA-1, 2 and 3 of the Palangana Mine has continued to operate at a
reduced pace and as a result, U3O8 pounds extracted from
the Palangana Mine and processed at the Hobson Processing Facility have
decreased significantly. During the three and six months ended January 31, 2015
, the Palangana Mine extracted 4,000 and 11,000 pounds of
U3O8, respectively, while the Hobson Processing Facility
processed 3,000 and 11,000 pounds of U3O8, respectively. During the three and
six months ended January 31, 2014, the Palangana Mine extracted 12,000 and
27,000 pounds of U3O8, respectively, while the Hobson
Processing Facility processed 12,000 and 28,000 pounds of
U3O8, respectively.

During the three and six months ended January 31, 2015 and
2014, no revenue from sales of U3O8 was generated. Since commencing
uranium extraction at the Palangana Mine in November 2010 to January 31, 2015,
the Hobson Processing Facility has processed finished goods representing 571,000
pounds of U3O8, of which 490,000 pounds have been sold,
resulting in a finished goods inventory balance of 81,000 pounds of
U3O8remaining as of January 31, 2015.

At January 31, 2015, the total value of inventories was
$2,101,666, of which $2,021,527 (96%) represented the carrying value of finished
goods of U3O8, $55,487 (3%) represented the carrying value
of work-in-progress and $24,652 (1%) represented the carrying value of supplies.
The cash component of the total carrying value of inventories was $1,689,711 and
the non-cash component of the total carrying value of inventory was $411,955.
For the six months ended January 31, 2015, no inventory write-down to net
realizable value was recognized.

At July 31, 2014, the total value of inventories was $1,896,475
of which $1,806,587 (96%) represented the carrying value of finished goods of
U3O8,$63,257 (3%) represented the carrying value of
work-in-progress and $26,631 (1%) represented the carrying value of supplies.
The cash component of the total carrying value of inventories was $1,527,676 and
the non-cash component of the total carrying value of inventory was $368,799.
During Fiscal 2014, inventory write-downs totaling $804,060 were recognized to
adjust the U3O8 inventory balances in finished goods and
work-in-progress to net realizable values to reflect market prices of U3O8, less
estimated royalties.

Cash and non-cash components of the total value of inventories
represent non-GAAP financial measures which we believe are important in
evaluating our operating results not only for management but for our investors.
We use these measures to compare our performance with other mining companies and
rely upon them as part of managements decision-making process.

Costs and Expenses

For the three and six months ended January 31, 2015, costs and
expenses totaled $5,110,201 and $11,125,162, respectively, comprised of mineral
property expenditures of $1,254,268 and $3,514,399, general and administrative
of $3,366,449 and $6,544,037 and depreciation, amortization and accretion of
$489,484 and $1,066,726. No inventory write-down or impairment loss on mineral
property was recorded. During the three and six months ended January 31, 2015,
no sales of U3O8 were generated therefore no corresponding cost of sales were
recorded.During the three and six months ended January 31, 2014,
costs and expenses totaled $6,314,381 and $11,170,432, respectively, comprised
of inventory write-down of $Nil and $392,149, mineral property expenditures of
$2,584,020 and $4,172,163, general and administrative of $3,082,480 and
$5,388,269, depreciation, amortization and accretion of $647,881 and $1,188,960
and impairment loss on mineral property of $Nil and $28,891. During the three
and six months ended January 31, 2014, no sales of U3O8
were generated therefore no corresponding cost of sales were recorded.

25

Mineral Property Expenditures

During the three and six months ended January 31, 2015, mineral
property expenditures totaled $1,254,268 and $3,514,399, respectively, comprised
of expenditures relating to permitting, property maintenance, exploration,
pre-extraction and all other non-extraction related activities on our uranium
projects. Additionally, these amounts include uranium extraction expenditures
directly related to maintaining operational readiness and permitting compliance
of $466,336 and $958,360, respectively, for the Palangana Mine and Hobson
Processing Facility.

During the three and six months ended January 31, 2014, mineral
property expenditures totaled $2,584,020 and $4,172,163, respectively, comprised
of expenditures relating to permitting, property maintenance, exploration,
pre-extraction and all other non-extraction related activities on our uranium
projects. Additionally, these amounts include uranium extraction expenditures
directly related to maintaining operational readiness of $751,918 and
$1,281,366, respectively, for the Palangana Mine and Hobson Processing Facility.

The following table is a summary of the mineral property
expenditures incurred on our uranium projects:

Three Months
Ended January 31,

Six Months
Ended January 31,

2015

2014

2015

2014

Mineral Property Expenditures

Palangana Mine

$

688,196

$

635,877

$

1,120,856

$

1,307,459

Goliad Project

20,036

1,027,060

54,293

1,172,031

Burke Hollow Project

159,981

423,771

1,140,548

598,069

Longhorn Project

19,477

20,456

30,723

28,700

Salvo Project

2,039

227

22,839

1,016

Anderson Project

29,250

43,524

123,422

127,685

Workman Creek Project

-

1,240

31,300

30,211

Slick Rock Project

-

1,986

49,784

51,011

Yuty Project

40,872

62,924

259,761

80,749

Coronel Oviedo Project

151,178

60,045

295,762

144,196

Other Mineral Property Expenditures

143,239

306,910

385,111

631,036

$

1,254,268

$

2,584,020

$

3,514,399

$

4,172,163

General and Administrative

During the three and six months ended January 31, 2015, general
and administrative expenses totaled $3,366,449 and $6,544,037 (three and six
months ended January 31, 2014: $3,082,480 and $5,388,269), respectively.

The following summary provides a discussion of the major
expense categories, including salaries, management and consulting fees; office,
investor relations, communications and travel; professional fees; and
stock-based compensation, including analyses of the factors that caused any
significant variances compared to the same period last year:

For the three and six months ended January 31, 2015, salaries, management
and consulting fees totaled $623,136 and $1,280,279 which decreased by
$903,372 and $940,931, respectively, compared with $1,526,508 and $2,221,210
for the three and six months ended January 31, 2014, respectively. These
decreases were primarily the result of no bonus payments made to certain
directors, officers, employees and consultants of the Company during the six
months ended January 31, 2015;

26

For the three and six months ended January 31, 2015, office, investor
relations, communications and travel expenses totaled $684,767 and $1,422,550
which decreased by $41,633 and $160,776, respectively, compared with $726,400
and $1,583,326 for the three and six months ended January 31, 2014,
respectively. These decreases reflect our continuing efforts to monitor and
control our costs overall to reduce expenses wherever possible;

For the three and six months ended January 31, 2015, professional fees
totaled $202,177 and $530,543 which decreased by $213,161 and $301,624,
respectively, compared with $415,338 and $832,167 for the three and six months
ended January 31, 2014, respectively. These decreases were primarily the
result of a decrease in professional fees relating to regulatory filings and
legal proceedings; and

For the three and six months ended January 31, 2015, stock-based
compensation totaled $1,856,369 and $3,310,665 which increased by $1,442,135
and $2,559,099, respectively, compared with $414,234 and $751,566 for the
three months and six months ended January 31, 2014, respectively. These
increases were primarily the result of stock options granted to the Companys
directors, officers, employees and consultants in September 2014, as well as
an increase in equity-based payments for consulting services as part of our
efforts to reduce cash outlay.

Depreciation, Amortization and Accretion

During the three and six months ended January 31, 2015,
depreciation, amortization and accretion totaled $489,484 and $1,066,726 which
decreased by $158,397 and $122,234, respectively, compared with $647,881 and
$1,188,960 for the three and six months ended January 31, 2014, respectively.
These decreases were primarily the result of extensions in the estimated useful
lives relating to the Palangana Mine combined with the effects of certain
equipment and property reaching full depletion and depreciation. Depreciation,
amortization and accretion include depreciation and amortization of long-term
assets acquired in the normal course of operations and accretion of asset
retirement obligations.

Interest and Finance Costs

During the three and six months ended January 31, 2015,
interest and finance costs totaled $767,854 and $1,505,343 which decreased by
$64,234 and $124,192, respectively, compared with $832,088 and $1,629,535 for
the three and six months ended January 31, 2014, respectively. These decreases
were primarily the result of extending the long-term debt term from two years to
four years during Fiscal 2014.

For the three and six months ended January 31, 2015, interest
and finance costs were primarily comprised of, respectively, amortization of
deferred financing costs of $20,953 and $41,905, amortization of debt discount
of $314,044 and $616,502, interest paid on long-term debt of $408,889 and
$817,778 and amortization of annual surety bond premium of $18,780 and $18,780.

For the three and six months ended January 31, 2014, interest
and finance costs were primarily comprised of, respectively, amortization of
deferred financing costs of $54,584 and $109,168, amortization of debt discount
of $465,648 and $896,655 and interest and standby fees paid on long-term debt of
$306,667 and $613,333.

27

Summary of Quarterly Results

For the
Quarters Ended

January 31, 2015

October 31, 2014

July 31, 2014

April 30, 2014

Sales

$

-

$

-

$

-

$

-

Net loss

(5,875,540)

(6,726,227)

(6,219,172)

(6,697,107)

Total comprehensive loss

(5,876,988)

(6,726,451)

(6,219,156)

(6,704,335)

Basic and diluted loss per share

(0.06)

(0.07)

(0.07)

(0.08)

Total assets

55,525,074

59,838,854

64,907,320

70,496,960

For the
Quarters Ended

January 31, 2014

October 31, 2013

July 31, 2013

April 30, 2013

Sales

$

-

$

-

$

1,980,000

$

2,789,325

Net loss

(7,178,894)

(5,879,934)

(5,077,213)

(3,900,045)

Total comprehensive loss

(7,182,920)

(5,882,235)

(5,050,693)

(3,900,279)

Basic and diluted loss per share

(0.08)

(0.07)

(0.06)

(0.05)

Total assets

67,320,964

73,692,104

73,250,001

67,927,245

Liquidity and Capital Resources

On September 5, 2013, we announced a strategic plan to align
our operations to adapt to the existing uranium market in a challenging
post-Fukushima environment, most notably the uranium spot price being at
historical lows. Since then, uranium extraction at the Palangana Mine has
operated at a reduced pace, including the deferral of any further pre-extraction
expenditures, to maintain operational readiness in anticipation of a recovery in
uranium spot prices. Pre-extraction activities at other PAAs of the Palangana
Mine and at the Goliad Project have continued, as well as further exploration
and permitting activities completed at the Burke Hollow Project. As a result, we
did not rely on cash flows generated from our mining activities during the six
months ended January 31, 2015 or Fiscal 2014 to the extent relied upon during
Fiscal 2013 and 2012.

In November 2014, we secured $5.6 million of surety bonds,
subject to a 2% annual premium on the face value, as an alternate source of
financial assurance for future remediation and decommissioning activities at the
Palangana Mine and Hobson Processing Facility. These surety bonds replaced an
equivalent amount of reclamation deposits funded entirely through cash payments
by the Company, allowing for the release of $3.9 million in cash to the Company.
The remaining $1.7 million, representing 30% of the face value of the surety
bonds and comprised of $1.1 million relating to the Palangana Mine and $0.6
million relating to the Hobson Processing Facility, is held as restricted cash
for collateral purposes as required by the surety.

The components of working capital include the following:

January 31, 2015

July 31, 2014

Cash and cash equivalents

$

4,362,544

$

8,839,892

Current assets

7,148,845

11,567,034

Current liabilities

1,478,416

2,298,334

Working capital

5,670,429

9,268,700

At January 31, 2015, we had working capital of $5,670,429, a
decrease of $3,598,271 from our working capital of $9,268,700 at July 31, 2014.
At January 31, 2015, we had $4,362,544 (July 31, 2014: $8,839,892) in cash and
cash equivalents, which continues to represent the largest component of our
working capital balance. As a result, our working capital balance will fluctuate
significantly as we secure additional financing and utilize our cash and cash
equivalents to fund our operations including exploration and pre-extraction
activities.

At January 31, 2015, we had 81,000 pounds of
U3O8 in finished goods inventories that were available for
sale with a carrying value of $2,021,527 and an approximate market value of $3.1
million.

Although our planned principal operations have commenced from
which significant revenues from sales of U3O8 were
realized during Fiscal 2013 of $9,026,325 and Fiscal 2012 of $13,757,400, we
have yet to achieve profitability and have had a history of operating losses and
significant negative cash flow since inception. No revenue from the sale of
U3O8 was realized during the six months ended January 31,
2015 or Fiscal 2014. For the six months ended January 31, 2015 and 2014, our net
losses totaled $12,601,767 and $13,058,828, respectively, and we had an
accumulated deficit balance of $181,263,913 as at January 31, 2015. During the
six months ended January 31, 2015, net cash flows decreased by $4,477,348
compared to a decrease of $5,137,861 during the six months ended January 31,
2014.

28

As described above, at January 31, 2015, we had working capital
of $5.7 million including cash and cash equivalents of $4.4 million. The
continuation of the Company as a going concern is dependent upon our ability to
obtain adequate additional financing which we have successfully secured since
inception, including those from asset divestitures. However, there is no
assurance that we will be successful in securing any form of additional
financing including further asset divestitures and accordingly, there is
substantial doubt as to whether our existing cash resources and working capital
are sufficient to enable the Company to continue its operations for the next
twelve months.

Historically, we have been reliant primarily on equity
financings from the sale of our common stock and, during Fiscal 2014 and 2013,
on debt financing in order to fund our operations, and this reliance is expected
to continue for the foreseeable future. During Fiscal 2013 and 2012, we also
relied on cash flows generated from our mining activities; however, we have yet
to achieve profitability or develop positive cash flow from operations, and we
do not expect to achieve profitability or develop positive cash flow from
operations in the near term. Our reliance on equity and debt financings is
expected to continue for the foreseeable future, and their availability whenever
such additional financing is required will be dependent on many factors beyond
our control including, but not limited to, the market price of uranium, the
continuing public support of nuclear power as a viable source of electricity
generation, the volatility in the global financial markets affecting our stock
price and the status of the worldwide economy, any one of which may cause
significant challenges in our ability to access additional financing, including
access to the equity and credit markets. We may also be required to seek other
forms of financing, such as joint venture arrangements to continue advancing our
uranium projects which would depend entirely on finding a suitable third party
willing to enter into such an arrangement, typically involving an assignment of
a percentage interest in the mineral project. However, there is no assurance
that we will be successful in securing any form of additional financing when
required and on terms favorable to us.

Our operations are capital intensive and future capital
expenditures are expected to be substantial, and we will require significant
additional financing to fund our operations, including continuing with our
exploration and pre-extraction activities. In the absence of such additional
financing, we would not be able to fund our operations, including continuing
with our exploration and pre-extraction activities, which may result in delays,
curtailment or abandonment of any one or all of our uranium projects.

Our anticipated operations including exploration and
pre-extraction activities, however, will be dependent on and may change as a
result of our financial position, the market price of uranium and other
considerations, and such change may include accelerating the pace or broadening
the scope of reducing our operations as originally announced on September 5,
2013. Our ability to secure adequate funding for these activities will be
impacted by our operating performance, other uses of cash, the market price of
uranium, the market price of our common stock and other factors which may be
beyond our control. Specific examples of such factors include, but are not
limited to:

if the weakness in the market price of uranium experienced in Fiscal 2014
continues or weakens further during Fiscal 2015;

if the weakness in the market price of our common stock experienced in
Fiscal 2014 continues or weakens further during Fiscal 2015;

if we default on making scheduled payments of principal, interest and fees
and complying with the restrictive covenants as required under our debt
financing during Fiscal 2015, and it results in accelerated repayment of our
indebtedness and/or enforcement by the lenders against certain key assets
securing our indebtedness; and

if another nuclear incident, such as the events that occurred at Fukushima
in March 2011, were to occur during Fiscal 2015, continuing public support of
nuclear power as a viable source of electricity generation may be adversely
affected, which may result in significant and adverse effects on both the
nuclear and uranium industries.

29

Our long-term success, including the recoverability of the
carrying values of our assets and our ability to acquire additional uranium
projects and continue with exploration and pre-extraction activities and mining
activities on our existing uranium projects, will depend ultimately on our
ability to achieve and maintain profitability and positive cash flow from our
operations by establishing ore bodies that contain commercially recoverable
uranium and to develop these into profitable mining activities. The economic
viability of our mining activities, including the expected duration and
profitability of the Palangana Mine and of any future satellite ISR mines, such
as the Goliad and Burke Hollow Projects, located within the South Texas Uranium
Belt, has many risks and uncertainties. These include, but are not limited to:
(i) a significant, prolonged decrease in the market price of uranium; (ii)
difficulty in marketing and/or selling uranium concentrates; (iii) significantly
higher than expected capital costs to construct the mine and/or processing
plant; (iv) significantly higher than expected extraction costs; (v)
significantly lower than expected uranium extraction; (vi) significant delays,
reductions or stoppages of uranium extraction activities; and (vii) the
introduction of significantly more stringent regulatory laws and regulations.
Our mining activities may change as a result of any one or more of these risks
and uncertainties and there is no assurance that any ore body that we extract
mineralized materials from will result in profitable mining activities.

Equity Financings

We previously filed a Form S-3 Shelf Registration Statement
effective September 2, 2011 (the 2011 Shelf) providing for the public offer
and sale of certain securities of the Company from time to time, at our
discretion, up to an aggregate amount of $50 million of which a total of $34.4
million was utilized through public offers and sales of shares and units. We
filed a further registration statement effective December 31, 2013 providing for
the public offer and sale of certain securities of the Company representing an
additional 20%, or $3.1 million, of the then remaining $15.6 million available
under the 2011 Shelf, which increased the remaining amount available under the
2011 Shelf to $18.7 million.

We filed a prospectus supplement to the 2011 Shelf, providing
for the public offer and sale of the Companys shares having an aggregate
offering price of up to $18.7 million through one or more at-the-market
offerings (the ATM Offering) pursuant to a Controlled Equity
OfferingSM Sales Agreement effective December 31, 2013 between Cantor
Fitzgerald & Co., as sales agent, and the Company. During the six months
ended January 31, 2015, we completed a public offer and sale of 280,045 shares
of the Company at a price of $1.70 per share for gross proceeds of $474,788
under the ATM Offering.

The 2011 Shelf expired on September 2, 2014. As a result, no
further public offer and sale of the Companys shares may be completed through
the ATM Offering under the 2011 Shelf.

We filed a second Form S-3 Shelf Registration Statement
effective January 10, 2014 providing for the public offer and sale of certain
securities of the Company from time to time, at its discretion, up to an
aggregate offering of $100 million.

Operating Activities

Net cash used in operating activities during the six months
ended January 31, 2015 was $8,795,608 (six months ended January 31, 2014:
$11,273,060). Significant operating expenditures included uranium extraction
costs, mineral property expenditures and general and administrative expenses.

Financing Activities

Net cash provided by financing activities during the six months
ended January 31, 2015 was $425,273, resulting primarily from net cash of
$411,041 received from the issuance of common shares from the equity financing
and $20,549 received from the exercise of stock options. Net cash provided by
financing activities during the six months ended January 31, 2014 was
$6,274,620, resulting primarily from net cash of $6,610,576 received from the
issuance of common shares from the equity financing and $22,501 received from
the exercise of stock options, offset by transaction costs of $357,497 related
to the loan facility.

Investing Activities

Net cash provided by investing activities during the six months
ended January 31, 2015 was $3,892,987, resulting primarily from gross proceeds
of $5,663,158 received from the release of reclamation deposits, offset by the
payment of collateral for the surety bonds of $1,690,208, acquisition of mineral
rights and properties of $73,624 and purchase of property, plant and equipment
of $5,993. Net cash used in investing activities during the six months ended
January 31, 2014 was $139,421, resulting primarily from the acquisition of
mineral rights and properties of $111,800 and purchase of property, plant and
equipment of $27,369.

30

Stock Options and Warrants

At January 31, 2015, the Company had stock options outstanding
representing 11,069,208 common shares at a weighted-average exercise price of
$1.39 per share and share purchase warrants outstanding representing 5,009,524
common shares at a weighted-average exercise price of $2.38 per share. At
January 31, 2015, outstanding stock options and warrants represented a total
16,078,732 shares issuable for gross proceeds of approximately $27,268,000
should these stock options and warrants be exercised in full. At January 31,
2015, outstanding in-the-money stock options and warrants represented a total
2,513,922 common shares exercisable for gross proceeds of approximately
$1,388,000 should these in-the-money stock options and warrants be exercised in
full. The exercise of these stock options and warrants is at the discretion of
the respective holders and, accordingly, there is no assurance that any of these
stock options or warrants will be exercised in the future.

Transactions with Directors and Officers

During the three and six months ended January 31, 2015, the
Company incurred $33,524 and $72,658 (three and six months ended January 31,
2014: $36,237 and $73,640), respectively, in general and administrative costs
paid to a company controlled by a direct family member of a director and
officer. In addition, during the six months ended January 31, 2015, the Company
issued 15,000 restricted shares to this company for consulting services with a
fair value of $18,150 included in general and administrative costs.

During the three and six months ended January 31, 2014, the
Company incurred $9,000 and $18,000, respectively, in consulting fees paid to a
company controlled by a former director of the Company.

At January 31, 2015, amounts owed to related parties totaled
$4,917 (July 31, 2014: $11,234). These amounts are unsecured, non-interest
bearing and due on demand.

Material Commitments

Material commitments of the Company since the filing of the
Form 10-K for the fiscal year ended July 31, 2014 have not changed, except for
commitments relating to executive management services which increased by
$229,000 due primarily to the appointment of an Executive Vice President in
September 2014.

At January 31, 2015, we have made all scheduled payments and
complied with all of the covenants under the Amended and Restated Credit
Agreement dated and effective March 13, 2014, and we expect to continue
complying with all scheduled payments and covenants during our fiscal year
ending July 31, 2015.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or
are reasonably likely to have a current or future material effect on our
financial condition, changes in financial condition, revenues or expenses,
results of operations, liquidity, capital expenditures or capital resources.

Critical Accounting Policies

For a complete summary of all of our significant accounting
policies, refer to Note 2: Summary of Significant Accounting Policies of the
Notes to the Consolidated Financial Statements as presented under Item 8.
Financial Statements and Supplementary Data in our Form 10-K Annual Report for
the fiscal year ended July 31, 2014.

Refer to Critical Accounting Policies under Item 7.
Managements Discussion and Analysis of Financial Condition and Results of
Operations in our Form 10-K Annual Report for the fiscal year ended July 31,
2014.

31

Item 3. Quantitative and Qualitative Disclosures About
Market Risk

Refer to Item 7A. Quantitative and Qualitative Disclosures
About Market Risk in our Form 10-K Annual Report for the fiscal year ended July
31, 2014.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Principal
Executive Officer and Principal Financial Officer, has evaluated the
effectiveness of our disclosure controls and procedures (as such term is defined
in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of the end of the
period covered by this report. Based on such evaluation, our Principal Executive
Officer and Principal Financial Officer have concluded that, as of the end of
the period covered by this report, our disclosure controls and procedures were
effective.

It should be noted that any system of controls is based in part
upon certain assumptions designed to obtain reasonable (and not absolute)
assurance as to its effectiveness, and there can be no assurance that any design
will succeed in achieving its stated goals.

Changes in Internal Controls

There have been no changes in our internal control over
financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the
Exchange Act) that occurred during our fiscal quarter ended January 31, 2015
that have materially affected, or are reasonably likely to materially affect,
our internal control over financial reporting.

32

PART II  OTHER INFORMATION

Item 1. Legal Proceedings

As of the date of this Quarterly Report, other than as
disclosed below, there are no material pending legal proceedings, other than
ordinary routine litigation incidental to our business, to which the Company or
any of its subsidiaries is a party or of which any of their property is subject,
and no director, officer, affiliate or record or beneficial owner of more than
5% of our common stock, or any associate or any such director, officer,
affiliate or security holder, is (i) a party adverse to us or any of our
subsidiaries in any legal proceeding or (ii) has an adverse interest to us or
any of our subsidiaries in any legal proceeding. Other than as disclosed below,
management is not aware of any other material legal proceedings pending or that
have been threatened against us or our properties.

On or about March 9, 2011, the Texas Commission on
Environmental Quality (the TCEQ) granted the Companys applications for a
Class III Injection Well Permit, Production Area Authorization and Aquifer
Exemption for its Goliad Project. On or about December 4, 2012, the U.S.
Environmental Protection Agency (the EPA) concurred with the TCEQ issuance of
the Aquifer Exemption permit (the AE). With the receipt of this concurrence,
the final authorization required for uranium extraction, the Goliad Project
achieved fully-permitted status. On or about May 24, 2011, a group of
petitioners, inclusive of Goliad County, appealed the TCEQ action to the
250th District Court in Travis County, Texas. A motion filed by the
Company to intervene in this matter was granted. The petitioners appeal lay
dormant until on or about June 14, 2013, when the petitioners filed their
initial brief in support of their position. On or about January 18, 2013, a
different group of petitioners, exclusive of Goliad County, filed a petition for
review with the Court of Appeals for the Fifth Circuit in the United States (the
Fifth Circuit) to appeal the EPAs decision. On or about March 5, 2013, a
motion filed by the Company to intervene in this matter was granted. The parties
attempted to resolve both appeals and, to facilitate discussions and to avoid
further legal costs, the parties jointly agreed, through mediation which was
initially conducted through the Fifth Circuit on or about August 8, 2013, to
abate the proceedings in the State District Court. On or about August 21, 2013,
the State District Court agreed to abate the proceedings. The EPA subsequently
filed a motion to remand without vacatur with the Fifth Circuit wherein the
EPA's stated purpose was to elicit additional public input and further explain
its rationale for the approval. In requesting the remand without vacatur, which
would allow the AE to remain in place during the review period, the EPA denied
the existence of legal error and stated that it was unaware of any additional
information that would merit reversal of the AE. The Company and the TCEQ filed
a request to the Fifth Circuit for the motion to remand without vacatur, if
granted, to be limited to a 60-day review period. On December 9, 2013, by way of
a procedural order from a three-judge panel of the Fifth Circuit, the Court
granted the remand without vacatur and initially limited the review period to 60
days. In March of 2014, at the EPAs request, the Fifth Circuit extended the
EPAs time period for review and additionally, during that same period, the
Company conducted a joint groundwater survey of the site, the result of which
reaffirmed the Companys previously filed groundwater direction studies. On or
about June 17, 2014, the EPA reaffirmed its earlier decision to uphold the
granting of the Companys existing AE, with the exception of a northwestern
portion containing less than 10% of the uranium resource which was withdrawn,
but not denied, from the AE area until additional information is provided in the
normal course of mine development. On or about September 9, 2014, the
petitioners filed a status report with the State District Court which included a
request to remove the stay agreed to in August 2013 and to set a briefing
schedule (the Status Report). In that Status Report, the petitioners also
stated that they had decided not to pursue their appeal at the Fifth Circuit.
The Company continues to believe that the pending appeal is without merit and is
continuing forward as planned towards uranium extraction at its fully-permitted
Goliad Project.

On or about April 3, 2012, the Company received notification of
a lawsuit filed in the State of Arizona, in the Superior Court for the County of
Yavapai, by certain petitioners (the Plaintiffs) against a group of
defendants, including the Company and former management and board members of
Concentric. The lawsuit asserts certain claims relating to the Plaintiffs
equity investments in Concentric, including allegations that the former
management and board members of Concentric engaged in various wrongful acts
prior to and/or in conjunction with the merger of Concentric. The lawsuit
originally further alleged that the Company was contractually liable for
liquidated damages arising from a pre-merger transaction which the Company
previously acknowledged and recorded as an accrued liability, and which portion
of the lawsuit was settled in full by a cash payment of $149,194 to the
Plaintiffs and subsequently dismissed. The court dismissed several other claims
set forth in the Plaintiffs initial complaint, but granted the Plaintiffs leave
to file an amended complaint. The court denied a subsequent motion to dismiss
the amended complaint, finding that the pleading met the minimal pleading
requirements under the applicable procedural rules. In October 2013, the Company
filed a formal response denying liability for any of the Plaintiffs remaining
claims and is vigorously defending against any and all remaining claims asserted
under this lawsuit. The parties have exchanged preliminary disclosure
statements, and formal discovery is currently in progress. A trial date has been
set for April 2016. The Company continues to believe that this lawsuit is
without merit, and intends to file a dispositive motion prior to the deadline
set by the court.

33

Item 1A. Risk Factors

In addition to the information contained in our Form 10-K
Annual Report for the fiscal year ended July 31, 2014 and this Form 10-Q
Quarterly Report, the following list of material risks and uncertainties should
be carefully reviewed by our stockholders and any potential investors in
evaluating our Company, our business and the market value of our common stock.
Any one of these risks and uncertainties has the potential to cause material
adverse effects on our business, prospects, financial condition and operating
results which could cause actual results to differ materially from any
forward-looking statements expressed by us and a significant decrease in the
market price of our common stock. Refer to Forward-Looking Statements as
disclosed in our Form 10-K Annual Report for the fiscal year ended July 31,
2014.

There is no assurance that we will be successful in
preventing the material adverse effects that any of the following risks and
uncertainties may cause, or that these potential risks and uncertainties are a
complete list of the risks and uncertainties facing us. Furthermore, there may
be additional risks and uncertainties that we are presently unaware of, or
presently consider immaterial, that may become material in the future and have a
material adverse effect on us. You could lose all or a significant portion of
your investment due to any of these risks and uncertainties.

Risks Related to Our Company and Business

Evaluating our future performance may be difficult since
we have a limited financial and operating history, with significant negative
cash flow and accumulated deficit to date. The continuation of the Company as a
going concern is dependent upon our ability to obtain adequate additional
financing, including those from asset divestitures. However, there is no
assurance that we will be successful in securing any form of additional
financing and accordingly, there is substantial doubt as to whether our existing
cash resources and working capital are sufficient to enable the Company to
continue its operations for the next twelve months. Furthermore, our long-term
success will depend ultimately on our ability to achieve and maintain
profitability and to develop positive cash flow from our mining activities.

As more fully described under Item 1. Business in our Form 10-K
Annual Report for the fiscal year ended July 31, 2014, Uranium Energy Corp. was
incorporated under the laws of the State of Nevada on May 16, 2003 and since
2004, we have been engaged in uranium mining and related activities, including
exploration, pre-extraction, extraction and processing on projects located in
the United States and Paraguay. In November 2010, we commenced uranium
extraction utilizing ISR for the first time at the Palangana Mine and processed
those materials at the Hobson Processing Facility into drums of
U3O8, our only sales product and source of revenue. We
also hold uranium projects in various stages of exploration and pre-extraction
in the States of Arizona, Colorado, New Mexico, Texas and Wyoming and the
Republic of Paraguay.

As more fully described under Liquidity and Capital Resources
of Item 2. Managements Discussion and Analysis of Financial Condition and
Result of Operations, we have a history of significant negative cash flow and
accumulated deficit since inception to January 31, 2015 of $181.3 million.
Although we generated revenues from sales of U3O8 during
Fiscal 2013 and 2012 of $9.0million and $13.8 million, respectively, we have yet
to achieve profitability or develop positive cash flow from our operations. No
revenues from the sale of U3O8 were generatedduring the
six months ended January 31, 2015 or during Fiscal 2014 or prior to Fiscal 2012.
Furthermore, we do not expect to achieve and maintain profitability or develop
positive cash flow from our operations in the near term. Historically, we have
been reliant primarily on equity financings and, more recently, on debt
financing to fund our operations and we expect this reliance to continue for the
foreseeable future. As a result of our limited financial and operating history,
including our significant negative cash flow and net losses to date, it may be
difficult to evaluate our future performance.

At January 31, 2015, we had working capital of $5.7 million
including cash and cash equivalents of $4.4 million. The continuation of the
Company as a going concern is dependent upon our ability to obtain adequate
additional financing which we have successfully secured since inception,
including those from asset divestitures. However, there is no assurance that we
will be successful in securing any form of additional financing including
further asset divestitures and accordingly, there is substantial doubt as to
whether our existing cash resources and working capital are sufficient to enable
the Company to continue its operations for the next twelve months.

34

Our long-term success, including the recoverability of the
carrying values of our assets and our ability to acquire additional uranium
projects and continue with exploration and pre-extraction activities and mining
activities on our existing uranium projects, will depend ultimately on our
ability to achieve and maintain profitability and positive cash flow from our
operations by establishing ore bodies that contain commercially recoverable
uranium and to develop these into profitable mining activities. The economic
viability of our mining activities, including the expected duration and
profitability of the Palangana Mine and of any future satellite ISR mines, such
as the Goliad and Burke Hollow Projects, located within the South Texas Uranium
Belt, has many risks and uncertainties. These include, but are not limited to:
(i) a significant, prolonged decrease in the market price of uranium; (ii)
difficulty in marketing and/or selling uranium concentrates; (iii) significantly
higher than expected capital costs to construct the mine and/or processing
plant; (iv) significantly higher than expected extraction costs; (v)
significantly lower than expected uranium extraction; (vi) significant delays,
reductions or stoppages of uranium extraction activities; and (vi) the
introduction of significantly more stringent regulatory laws and regulations.
Our mining activities may change as a result of any one or more of these risks
and uncertainties and there is no assurance that any ore body that we extract
mineralized materials from will result in achieving and maintaining
profitability and developing positive cash flow.

Our operations are capital intensive, and we will require
significant additional financing to acquire additional uranium projects and
continue with our exploration and pre-extraction activities on our existing
uranium projects. However, there is no assurance that we will be successful in
securing any form of additional financing when required and on terms favorable
to us.

Our operations are capital intensive and future capital
expenditures are expected to be substantial. We will require significant
additional financing to fund our operations, including continuing with our
exploration and pre-extraction activities which include assaying, drilling,
geological and geochemical analysis and mine construction costs. In the absence
of such additional financing, we would not be able to fund our operations,
including continuing with our exploration and pre-extraction activities, which
may result in delays, curtailment or abandonment of any one or all of our
uranium projects.

Historically, we have been reliant primarily on equity
financings from the sale of our common stock and, for Fiscal 2014 and 2013, on
debt financing in order to fund our operations. We have also relied on cash
flows generated from our mining activities during Fiscal 2013 and 2012, however,
we have yet to achieve profitability or develop positive cash flow from
operations. Our reliance on equity and debt financings is expected to continue
for the foreseeable future, and their availability whenever such additional
financing is required, will be dependent on many factors beyond our control
including, but not limited to, the market price of uranium, the continuing
public support of nuclear power as a viable source of electricity generation,
the volatility in the global financial markets affecting our stock price and the
status of the worldwide economy, any one of which may cause significant
challenges in our ability to access additional financing, including access to
the equity and credit markets. We may also be required to seek other forms of
financing, such as asset divestitures or joint venture arrangements to continue
advancing our uranium projects which would depend entirely on finding a suitable
third party willing to enter into such an arrangement, typically involving an
assignment of a percentage interest in the mineral project. However, there is no
assurance that we will be successful in securing any form of additional
financing when required and on terms favorable to us.

We entered into an amended and restated credit agreement dated
and effective March 13, 2014, which superseded in its entirety a prior credit
agreement dated and effective July 30, 2013, which provides for a $20 million
secured credit facility, pursuant to which we had drawn down $20 million in
principal as of July 31, 2014. The amended and restated credit agreement
includes restrictive covenants that, among other things, limit our ability to
sell the assets securing our indebtedness or to incur additional indebtedness
other than permitted indebtedness, which may restrict our ability to pursue
certain business strategies from time to time. If we do not comply with these
covenants, we could be in default which, if not addressed or waived, could
require accelerated repayment of our indebtedness and/or enforcement by the
lenders against certain key assets securing our indebtedness.

If we are unable to service our indebtedness, we could
lose the assets securing our indebtedness.

Our ability to make scheduled payments of principal, interest
and fees, including compliance with the restrictive covenants under our amended
and restated credit agreement, will be dependent on and may change as a result
of our financial condition and operating performance. If we cannot make
scheduled payments on our debt, we will be in default which, if not addressed or
waived, could require accelerated repayment of our indebtedness and/or
enforcement by the lenders against certain assets securing our indebtedness. Our
amended and restated credit agreement is secured against the lease and related
rights comprising the Hobson Processing Facility and the mineral and related
rights comprising the Goliad Project. These are key assets on which our business
is substantially dependent and as such, the enforcement against any one or all
of these assets would have a material adverse effect on our operations and
financial condition.

35

Our uranium extraction and sales history is limited, with
our uranium extraction originating from a single uranium mine. Our ability to
continue generating revenue is subject to a number of factors, any one or more
of which may adversely affect our revenues, results of operations and financial
condition.

We have a limited history of uranium extraction and generating
revenue. In November 2010, we commenced uranium extraction at a single uranium
mine, the Palangana Mine, which has been our sole source for the
U3O8 sold to generate our revenues of $9.0 million during
Fiscal 2013 and $13.8 million during Fiscal 2012, with no revenues from the sale
of U3O8 generated during Fiscal 2014 or prior to Fiscal
2012. During Fiscal 2014, we announced a strategic plan to align our operations
to adapt to the existing uranium market in a challenging post-Fukushima
environment and as a result, uranium extraction at the Palangana Mine operated
at a reduced pace, including the deferral of any further pre-extraction
expenditures, to maintain operational readiness in anticipation of a recovery in
uranium prices. Our ability to continue generating revenue from the Palangana
Mine is subject to a number of factors which include, but are not limited to,
(i) a significant, prolonged decrease in the market price of uranium; (ii)
difficulty in marketing and/or selling uranium concentrates; (iii) significantly
higher than expected capital costs to construct the mine and/or processing
plant; (iv) significantly higher than expected extraction costs; (v)
significantly lower than expected uranium extraction; (vi) significant delays,
reductions or stoppages of uranium extraction activities; and (vii) the
introduction of significantly more stringent regulatory laws and regulations.
Furthermore, continued mining activities at the Palangana Mine will eventually
deplete the Palangana Mine or become uneconomical, and if we are unable to
directly acquire or develop our existing uranium projects, such as the Goliad
and Burke Hollow Projects, into additional uranium mines from which we can
commence uranium extraction, it will negatively impact our ability to continue
generating revenues. Any one or more of these occurrences may adversely affect
our results of operations and financial condition.

Uranium exploration and pre-extraction programs and
mining activities are inherently subject to numerous significant risks and
uncertainties, and actual results may differ significantly from expectations or
anticipated amounts. Furthermore, exploration programs conducted on our uranium
projects may not result in the establishment of ore bodies that contain
commercially recoverable uranium.

Uranium exploration and pre-extraction programs and mining
activities are inherently subject to numerous significant risks and
uncertainties, many beyond our control, including, but not limited to: (i)
unanticipated ground and water conditions and adverse claims to water rights;
(ii) unusual or unexpected geological formations; (iii) metallurgical and other
processing problems; (iv) the occurrence of unusual weather or operating
conditions and other force majeure events; (v) lower than expected ore grades;
(vi) industrial accidents; (vii) delays in the receipt of or failure to receive
necessary government permits; (viii) delays in transportation; (ix) availability
of contractors and labor; (x) government permit restrictions and regulation
restrictions; (xi) unavailability of materials and equipment; and (xii) the
failure of equipment or processes to operate in accordance with specifications
or expectations. These risks and uncertainties could result in: delays,
reductions or stoppages in our mining activities; increased capital and/or
extraction costs; damage to, or destruction of, our mineral projects, extraction
facilities or other properties; personal injuries; environmental damage;
monetary losses; and legal claims.

Success in uranium exploration is dependent on many factors,
including, without limitation, the experience and capabilities of a companys
management, the availability of geological expertise and the availability of
sufficient funds to conduct the exploration program. Even if an exploration
program is successful and commercially recoverable uranium is established, it
may take a number of years from the initial phases of drilling and
identification of the mineralization until extraction is possible, during which
time the economic feasibility of extraction may change such that the uranium
ceases to be economically recoverable. Uranium exploration is frequently
non-productive due, for example, to poor exploration results or the inability to
establish ore bodies that contain commercially recoverable uranium, in which
case the uranium project may be abandoned and written-off. Furthermore, we will
not be able to benefit from our exploration efforts and recover the expenditures
that we incur on our exploration programs if we do not establish ore bodies that
contain commercially recoverable uranium and develop these uranium projects into
profitable mining activities, and there is no assurance that we will be
successful in doing so for any of our uranium projects.

36

Whether an ore body contains commercially recoverable uranium
depends on many factors including, without limitation: (i) the particular
attributes, including material changes to those attributes, of the deposit such
as size, grade, recovery rates and proximity to infrastructure; (ii) the market
price of uranium, which may be volatile; and (iii) government regulations and
regulatory requirements including, without limitation, those relating to
environmental protection, permitting and land use, taxes, land tenure and
transportation.

We have not established proven or probable reserves
through the completion of a final or bankable feasibility study for any of
our uranium projects, including the Palangana Mine. Furthermore, we have no
plans to establish proven or probable reserves for any of our uranium projects
for which we plan on utilizing ISR mining, such as the Palangana Mine. Since we
commenced extraction of mineralized materials from the Palangana Mine without
having established proven or probable reserves, it may result in our mining
activities at the Palangana Mine, and at any future uranium projects for which
proven or probable reserves are not established, being inherently riskier than
other mining activities for which proven or probable reserves have been
established.

We have established the existence of mineralized materials for
certain uranium projects, including the Palangana Mine. We have not established
proven or probable reserves, as defined by the SEC under Industry Guide 7,
through the completion of a final or bankable feasibility study for any of
our uranium projects, including the Palangana Mine. Furthermore, we have no
plans to establish proven or probable reserves for any of our uranium projects
for which we plan on utilizing ISR mining, such as the Palangana Mine. Since we
commenced uranium extraction at the Palangana Mine without having established
proven or probable reserves, there may be greater inherent uncertainty as to
whether or not any mineralized material can be economically extracted as
originally planned and anticipated. Any mineralized materials established or
extracted from the Palangana Mine should not in any way be associated with
having established or produced from proven or probable reserves.

Since we are in the Exploration Stage, pre-production
expenditures including those related to pre-extraction activities are expensed
as incurred, the effects of which may result in our consolidated financial
statements not being directly comparable to the financial statements of
companies in the Production Stage.

Despite the fact that we commenced uranium extraction at the
Palangana Mine in November 2010, we remain in the Exploration Stage as defined
under Industry Guide 7, and will continue to remain in the Exploration Stage
until such time proven or probable reserves have been established, which may
never occur. We prepare our consolidated financial statements in accordance with
United States generally accepted accounting principles (U.S. GAAP) under which
acquisition costs of mineral rights are initially capitalized as incurred while
pre-production expenditures are expensed as incurred until such time we exit the
Exploration Stage. Expenditures relating to exploration activities are expensed
as incurred and expenditures relating to pre-extraction activities are expensed
as incurred until such time proven or probable reserves are established for that
uranium project, after which subsequent expenditures relating to mine
development activities for that particular project are capitalized as incurred.

We have neither established nor have any plans to establish
proven or probable reserves for our uranium projects for which we plan on
utilizing ISR mining, such as the Palangana Mine. Companies in the Production
Stage as defined by the SEC under Industry Guide 7, having established proven
and probable reserves and exited the Exploration Stage, typically capitalize
expenditures relating to ongoing development activities, with corresponding
depletion calculated over proven and probable reserves using the
units-of-production method and allocated to future reporting periods to
inventory and, as that inventory is sold, to cost of goods sold. As we are in
the Exploration Stage, it has resulted in us reporting larger losses than if we
had been in the Production Stage due to the expensing, instead of
capitalization, of expenditures relating to ongoing mill and mine pre-extraction
activities. Additionally, there would be no corresponding amortization allocated
to our future reporting periods since those costs would have been expensed
previously, resulting in both lower inventory costs and cost of goods sold and
results of operations with higher gross profits and lower losses than if we had
been in the Production Stage. Any capitalized costs, such as acquisition costs
of mineral rights, are depleted over the estimated extraction life using the
straight-line method. As a result, our consolidated financial statements may not
be directly comparable to the financial statements of companies in the
Production Stage.

We have recorded estimated reclamation obligations
relating to our uranium projects which may be exceeded by the actual reclamation
costs when incurred in the future.

37

We are responsible for certain reclamation obligations in the
future, primarily for the Hobson Processing Facility and the Palangana Mine, and
have recorded a liability on our balance sheet to recognize such estimated
reclamation costs. There is a risk, however, that the actual reclamation costs
when incurred in the future will exceed the estimated amounts recorded, which
will adversely affect our results of operations and financial performance.

We do not insure against all of the risks we face in our
operations.

In general, where coverage is available and not prohibitively
expensive relative to the perceived risk, we will maintain insurance against
such risk, subject to exclusions and limitations. We currently maintain
insurance against general commercial liability claims and certain physical
assets used in our operations, subject to exclusions and limitations, however,
we do not maintain insurance to cover all of the potential risks and hazards
associated with our operations. We may be subject to liability for
environmental, pollution or other hazards associated with our exploration,
pre-extraction and extraction activities, which we may not be insured against,
which may exceed the limits of our insurance coverage or which we may elect not
to insure against because of high premiums or other reasons. Furthermore, we
cannot provide assurance that any insurance coverage we currently have will
continue to be available at reasonable premiums or that such insurance will
adequately cover any resulting liability.

Acquisitions that we may make from time to time could
have an adverse impact on us.

From time to time, we examine opportunities to acquire
additional mining assets and businesses. Any acquisition that we may choose to
complete may be of a significant size, may change the scale of our business and
operations, and may expose us to new geographic, political, operating, financial
and geological risks. Our success in our acquisition activities depends on our
ability to identify suitable acquisition candidates, negotiate acceptable terms
for any such acquisition, and integrate the acquired operations successfully
with those of our Company. Any acquisitions would be accompanied by risks which
could have a material adverse effect on our business. For example, there may be
a significant change in commodity prices after we have committed to complete the
transaction and established the purchase price or exchange ratio; a material ore
body may prove to be below expectations; we may have difficulty integrating and
assimilating the operations and personnel of any acquired companies, realizing
anticipated synergies and maximizing the financial and strategic position of the
combined enterprise, and maintaining uniform standards, policies and controls
across the organization; the integration of the acquired business or assets may
disrupt our ongoing business and our relationships with employees, customers,
suppliers and contractors; and the acquired business or assets may have unknown
liabilities which may be significant. In the event that we choose to raise debt
capital to finance any such acquisition, our leverage will be increased. If we
choose to use equity as consideration for such acquisition, existing
shareholders may suffer dilution. Alternatively, we may choose to finance any
such acquisition with our existing resources. There can be no assurance that we
would be successful in overcoming these risks or any other problems encountered
in connection with such acquisitions.

The uranium industry is subject to numerous stringent
laws, regulations and standards, including environmental protection laws and
regulations. If any changes occur that would make these laws, regulations and
standards more stringent, it may require capital outlays in excess of those
anticipated or cause substantial delays, which would have a material adverse
effect on our operations.

The laws, regulations, policies or current administrative
practices of any government body, organization or regulatory agency in the
United States or any other applicable jurisdiction, may change or be applied or
interpreted in a manner which may also have a material adverse effect on our
operations. The actions, policies or regulations, or changes thereto, of any
government body or regulatory agency or special interest group, may also have a
material adverse effect on our operations.

Uranium exploration and pre-extraction programs and mining
activities are subject to stringent environmental protection laws and
regulations at the federal, state, and local levels. These laws and regulations,
which include permitting and reclamation requirements, regulate emissions, water
storage and discharges and disposal of hazardous wastes. Uranium mining
activities are also subject to laws and regulations which seek to maintain
health and safety standards by regulating the design and use of mining methods.
Various permits from governmental and regulatory bodies are required for mining
to commence or continue, and no assurance can be provided that required permits
will be received in a timely manner.

38

Our compliance costs including the posting of surety bonds
associated with environmental protection laws and regulations and health and
safety standards have been significant to date, and are expected to increase in
scale and scope as we expand our operations in the future. Furthermore,
environmental protection laws and regulations may become more stringent in the
future, and compliance with such changes may require capital outlays in excess
of those anticipated or cause substantial delays, which would have a material
adverse effect on our operations.

To the best of our knowledge, our operations are in compliance,
in all material respects, with all applicable laws, regulations and standards.
If we become subject to liability for any violations, we may not be able or may
elect not to insure against such risk due to high insurance premiums or other
reasons. Where coverage is available and not prohibitively expensive relative to
the perceived risk, we will maintain insurance against such risk, subject to
exclusions and limitations. However, we cannot provide any assurance that such
insurance will continue to be available at reasonable premiums or that such
insurance will be adequate to cover any resulting liability.

We may not be able to obtain or maintain necessary
licenses.

Our exploration and mining activities are dependent upon the
grant of appropriate authorizations, licences, permits and consents, as well as
continuation of these authorizations, licences, permits and consents already
granted, which may be granted for a defined period of time, or may not be
granted or may be withdrawn or made subject to limitations. There can be no
assurance that all necessary authorizations, licences, permits and consents will
be granted to us, or that authorizations, licences, permits and consents already
granted will not be withdrawn or made subject to limitations.

Major nuclear incidents may have adverse effects on the
nuclear and uranium industries.

The nuclear incident that occurred in Japan in March 2011 had
significant and adverse effects on both the nuclear and uranium industries. If
another nuclear incident were to occur, it may have further adverse effects for
both industries. Public opinion of nuclear power as a source of electricity
generation may be adversely affected, which may cause governments of certain
countries to further increase regulation for the nuclear industry, reduce or
abandon current reliance on nuclear power or reduce or abandon existing plans
for nuclear power expansion. Any one of these occurrences has the potential to
reduce current and/or future demand for nuclear power, resulting in lower demand
for uranium and lower market prices for uranium, adversely affecting the
Companys operations and prospects. Furthermore, the growth of the nuclear and
uranium industries is dependent on continuing and growing public support of
nuclear power as a viable source of electricity generation.

The marketability of uranium concentrates will be
affected by numerous factors beyond our control which may result in our
inability to receive an adequate return on our invested capital.

The marketability of uranium concentrates extracted by us will
be affected by numerous factors beyond our control. These factors include
macroeconomic factors, fluctuations in the market price of uranium, governmental
regulations, land tenure and use, regulations concerning the importing and
exporting of uranium and environmental protection regulations. The future
effects of these factors cannot be accurately predicted, but any one or a
combination of these factors may result in our inability to receive an adequate
return on our invested capital.

The uranium industry is highly competitive and we may not
be successful in acquiring additional projects.

The uranium industry is highly competitive, and our competition
includes larger, more established companies with longer operating histories that
not only explore for and produce uranium, but also market uranium and other
products on a regional, national or worldwide basis. Due to their greater
financial and technical resources, we may not be able to acquire additional
uranium projects in a competitive bidding process involving such companies.
Additionally, these larger companies have greater resources to continue with
their operations during periods of depressed market conditions.

We hold mineral rights in foreign jurisdictions which
could be subject to additional risks due to political, taxation, economic and
cultural factors.

39

We hold certain mineral rights located in Paraguay through the
acquisition of Piedra Rica Mining S.A. and Transandes Paraguay S.A., both
companies incorporated in Paraguay. Operations in foreign jurisdictions outside
of the U.S. and Canada, especially in developing countries, may be subject to
additional risks as they may have different political, regulatory, taxation,
economic and cultural environments that may adversely affect the value or
continued viability of our rights. These additional risks include, but are not
limited to: (i) changes in governments or senior government officials; (ii)
changes to existing laws or policies on foreign investments, environmental
protection, mining and ownership of mineral interests; (iii) renegotiation,
cancellation, expropriation and nationalization of existing permits or
contracts; (iv) foreign currency controls and fluctuations; and (v) civil
disturbances, terrorism and war.

In the event of a dispute arising at our foreign operations in
Paraguay, we may be subject to the exclusive jurisdiction of foreign courts or
may not be successful in subjecting foreign persons to the jurisdiction of the
courts in the United States or Canada. We may also be hindered or prevented from
enforcing our rights with respect to a government entity or instrumentality
because of the doctrine of sovereign immunity. Any adverse or arbitrary decision
of a foreign court may have a material and adverse impact on our business,
prospects, financial condition and results of operations.

There is no guarantee that title to our mineral property
interests will not be challenged.

Although we have taken reasonable measures to ensure proper
title to our interests in mineral properties and other assets, there is no
guarantee that the title to any of such interests will not be challenged. No
assurance can be given that we will be able to secure the grant or the renewal
of existing mineral rights and tenures on terms satisfactory to us, or that
governments in the jurisdictions in which we operate will not revoke or
significantly alter such rights or tenures or that such rights or tenures will
not be challenged or impugned by third parties, including local governments,
aboriginal peoples or other claimants. Our mineral properties may be subject to
prior unregistered agreements, transfers or claims, and title may be affected
by, among other things, undetected defects. A successful challenge to the
precise area and location of our claims could result in us being unable to
operate on our properties as permitted or being unable to enforce our rights
with respect to our properties.

Due to the nature of our business, we may be subject to
legal proceedings which may divert managements time and attention from our
business and result in substantial damage awards.

Due to the nature of our business, we may be subject to
numerous regulatory investigations, civil claims, lawsuits and other proceedings
in the ordinary course of our business including those described under Item 1.
Legal Proceedings. No reserves have been established for any potential liability
relating to these lawsuits. The outcome of these lawsuits is uncertain and
subject to inherent uncertainties, and the actual costs to be incurred will
depend upon many unknown factors. We may be forced to expend significant
resources in the defense of these suits, and we may not prevail. Defending
against these and other lawsuits in the future may not only require us to incur
significant legal fees and expenses, but may become time-consuming for us and
detract from our ability to fully focus our internal resources on our business
activities. The results of any legal proceeding cannot be predicted with
certainty due to the uncertainty inherent in litigation, the difficulty of
predicting decisions of regulators, judges and juries and the possibility that
decisions may be reversed on appeal. There can be no assurances that these
matters will not have a material adverse effect on our business, results of
operations or financial position.

We depend on certain key personnel, and our success will
depend on our continued ability to retain and attract such qualified personnel.

Our success is dependent on the efforts, abilities and
continued service of certain senior officers and key employees and consultants.
A number of our key employees and consultants have significant experience in the
uranium industry. A loss of service from any one of these individuals may
adversely affect our operations, and we may have difficulty or may not be able
to locate and hire a suitable replacement.

Certain directors and officers may be subject to
conflicts of interest.

The majority of our directors and officers are involved in
other business ventures including similar capacities with other private or
publicly-traded companies. Such individuals may have significant
responsibilities to these other business ventures, including consulting
relationships, which may require significant amounts of their available time.
Conflicts of interest may include decisions on how much time to devote to our
business affairs and what business opportunities should be presented to us. Our
Code of Business Conduct for Directors, Officers and Employees provides for
guidance on conflicts of interest.

40

The laws of the State of Nevada and our Articles of
Incorporation may protect our directors and officers from certain types of
lawsuits.

The laws of the State of Nevada provide that our directors and
officers will not be liable to the Company or its stockholders for monetary
damages for all but certain types of conduct as directors and officers of the
Company. Our Bylaws provide for broad indemnification powers to all persons
against all damages incurred in connection with our business to the fullest
extent provided or allowed by law. These indemnification provisions may require
us to use our limited assets to defend our directors and officers against
claims, and may have the effect of preventing stockholders from recovering
damages against our directors and officers caused by their negligence, poor
judgment or other circumstances.

Several of our directors and officers are residents
outside of the U.S., and it may be difficult for stockholders to enforce within
the U.S. any judgments obtained against such directors or officers.

Several of our directors and officers are nationals and/or
residents of countries other than the U.S., and all or a substantial portion of
such persons' assets are located outside of the U.S. As a result, it may be
difficult for investors to effect service of process on such directors and
officers, or enforce within the U.S. any judgments obtained against such
directors and officers, including judgments predicated upon the civil liability
provisions of the securities laws of the U.S. or any state thereof.
Consequently, stockholders may be effectively prevented from pursuing remedies
against such directors and officers under U.S. federal securities laws. In
addition, stockholders may not be able to commence an action in a Canadian court
predicated upon the civil liability provisions under U.S. federal securities
laws. The foregoing risks also apply to those experts identified in this
document that are not residents of the U.S.

Disclosure controls and procedures and internal control
over financial reporting, no matter how well designed and operated, are designed
to obtain reasonable, and not absolute, assurance as to its reliability and
effectiveness.

Managements evaluation on the effectiveness of disclosure
controls and procedures is designed to ensure that information required for
disclosure in our public filings is recorded, processed, summarized and reported
on a timely basis to our senior management, as appropriate, to allow timely
decisions regarding required disclosure. Managements report on internal control
over financial reporting is designed to provide reasonable assurance that
transactions are properly authorized, assets are safeguarded against
unauthorized or improper use and transactions are properly recorded and
reported. Any system of controls, no matter how well designed and operated, is
based in part upon certain assumptions designed to obtain reasonable, and not
absolute, assurance as to its reliability and effectiveness.

Risks Related to Our Common Stock

Historically, the market price of our common stock has
been and may continue to fluctuate significantly.

On September 28, 2007, our common stock commenced trading on
the NYSE MKT Equities Exchange (formerly known as the American Stock Exchange
and the NYSE Amex Equities Exchange) and prior to that, traded on the OTC
Bulletin Board.

The global markets have experienced significant and increased
volatility in the past, and have been impacted by the effects of mass sub-prime
mortgage defaults and liquidity problems of the asset-backed commercial paper
market, resulting in a number of large financial institutions requiring
government bailouts or filing for bankruptcy. The effects of these past events
and any similar events in the future may continue to or further affect the
global markets, which may directly affect the market price of our common stock
and our accessibility for additional financing. Although this volatility may be
unrelated to specific company performance, it can have an adverse effect on the
market price of our shares which, historically, has fluctuated significantly and
may continue to do so in the future.

In addition to the volatility associated with general economic
trends and market conditions, the market price of our common stock could decline
significantly due to the impact of any one or more events, including, but not
limited to, the following: (i) volatility in the uranium market; (ii) occurrence
of a major nuclear incident such as the events in Fukushima in March 2011; (iii)
changes in the outlook for the nuclear power and uranium industries; (iv)
failure to meet market expectations on our exploration, pre-extraction or
extraction activities, including abandonment of key uranium projects; (v) sales
of a large number of our shares held by certain stockholders including
institutions and insiders; (vi) downward revisions to previous estimates on us
by analysts; (vii) removal from market indices; (viii) legal claims brought
forth against us; and (ix) introduction of technological innovations by
competitors or in competing technologies.

41

A prolonged decline in the market price of our common
stock could affect our ability to obtain additional financing which would
adversely affect our operations.

Historically, we have relied on equity financing and more
recently, on debt financing, as primary sources of financing. A prolonged
decline in the market price of our common stock or a reduction in our
accessibility to the global markets may result in our inability to secure
additional financing which would have an adverse effect on our operations.

Additional issuances of our common stock may result in
significant dilution to our existing shareholders and reduce the market value of
their investment.

We are authorized to issue 750,000,000 shares of common stock
of which 91,891,620 shares were issued and outstanding as of January 31, 2015.
Future issuances for financings, mergers and acquisitions, exercise of stock
options and share purchase warrants and for other reasons may result in
significant dilution to and be issued at prices substantially below the price
paid for our shares held by our existing stockholders. Significant dilution
would reduce the proportionate ownership and voting power held by our existing
stockholders, and may result in a decrease in the market price of our shares.

We filed a Form S-3 Shelf Registration Statement, which was
declared effective on January 10, 2014. This Shelf Registration Statement
provides for the public offer and sale of certain securities of the Company from
time to time, at our discretion, up to an aggregate offering amount of $100
million.

We are subject to the Continued Listing Criteria of the
NYSE MKT and our failure to satisfy these criteria may result in delisting of
our common stock.

Our common stock is currently listed on the NYSE MKT. In order
to maintain this listing, we must maintain certain share prices, financial and
share distribution targets, including maintaining a minimum amount of
shareholders equity and a minimum number of public shareholders. In addition to
these objective standards, the NYSE MKT may delist the securities of any issuer
if, in its opinion, the issuers financial condition and/or operating results
appear unsatisfactory; if it appears that the extent of public distribution or
the aggregate market value of the security has become so reduced as to make
continued listing on the NYSE MKT inadvisable; if the issuer sells or disposes
of principal operating assets or ceases to be an operating company; if an issuer
fails to comply with the NYSE MKTs listing requirements; if an issuers common
stock sells at what the NYSE MKT considers a low selling price and the issuer
fails to correct this via a reverse split of shares after notification by the
NYSE MKT; or if any other event occurs or any condition exists which makes
continued listing on the NYSE MKT, in its opinion, inadvisable.

If the NYSE MKT delists our common stock, investors may face
material adverse consequences, including, but not limited to, a lack of trading
market for our securities, reduced liquidity, decreased analyst coverage of our
securities, and an inability for us to obtain additional financing to fund our
operations.

Item 2. Unregistered Sales of Equity Securities and Use
of Proceeds

During our fiscal quarter ended January 31, 2015, we issued the
following securities that were not registered under the Securities Act of 1933,
as amended (the U.S. Securities Act):

On November 4, 2014, December 4, 2014 and January 2, 2015, we issued 7,500
shares of restricted common stock, 7,500 shares of restricted common stock and
7,500 shares of restricted common stock, respectively, to a consultant at a
deemed issuance price of $1.35 per share in consideration for services under a
consulting agreement. We relied on exemptions from registration under the U.S.
Securities Act provided by Regulation S and/or Section 4(a)(2) with respect to
the issuance of these shares.

On November 21, 2014, we issued an aggregate of 75,000 restricted common
shares to two consultants at a deemed issuance price of $1.90 per share in
consideration for services under consulting agreements. We relied on
exemptions from registration under the U.S. Securities Act provided by
Regulation S and/or Section 4(a)(2) for one of the consultants and by Rule 506
of Regulation D and/or Section 4(a)(2) of the U.S. Securities Act with respect
to the other consultant.

42

On November 21, 2014 and December 19, 2014, we issued 70,000 shares of
restricted common stock and 55,000 shares of common stock, respectively, to a
consultant at a deemed issuance price of $1.15 per share in consideration for
services under a consulting agreement. We relied on exemptions from
registration under the U.S. Securities Act provided by Regulation S and/or
Section 4(a) (2) with respect to the issuance of these shares.

On November 27, 2014 and December 26, 2014, we issued 23,365 shares of
restricted common stock and 23,365 shares of restricted common stock,
respectively, to a consultant at a deemed issuance price of $1.07 per share in
consideration for services under a consulting agreement. We relied on
exemptions from registration under the U.S. Securities Act provided by
Regulation S and/or Section 4(a)(2) with respect to the issuance of these
shares.

On December 5, 2014 and January 5, 2015, we issued 11,111 shares of
restricted common stock and 11,111 shares of restricted common stock,
respectively, to a consultant at a deemed issuance price of $1.87 per share in
consideration for services under a consulting agreement. We relied on
exemptions from registration under the U.S. Securities Act provided by Rule
506 of Regulation D and/or Section 4(a) (2) with respect to the issuance of
these shares.

On December 19, 2014, we issued 5,000 shares of restricted common stock to
a consultant at a deemed issuance price of $1.20 per share in consideration
for services under a consulting agreement. We relied on exemptions from
registration under the U.S. Securities Act provided by Regulation S and/or
Section 4(a)(2) with respect to the issuance of these shares.

Item 3. Defaults Upon Senior
Securities

None.

Item 4. Mine Safety Disclosures

Pursuant to Section 1503(a) of the Dodd-Frank Wall Street
Reform and Consumer Protection Act of 2010 (the Dodd-Frank Act), issuers that
are operators, or that have a subsidiary that is an operator, of a coal or other
mine in the United States, and that is subject to regulation by the Federal Mine
Safety and Health Administration under the Mine Safety and Health Act of 1977
(Mine Safety Act), are required to disclose in their periodic reports filed
with the SEC information regarding specified health and safety violations,
orders and citations, related assessments and legal actions, and mining-related
fatalities. During the quarter ended January 31, 2015, the Companys Palangana
Mine was not subject to regulation by the Federal Mine Safety and Health
Administration under the Mine Safety Act.

Item 5. Other Information

None.

Item 6. Exhibits

The following exhibits are included with this Quarterly Report
on Form 10-Q: